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                   DISSENTING STATEMENT OF 

Re: NOS Communications, Inc. and Affinity Network, Inc. 
Apparent Liability for Forfeiture, Notice of Apparent 
Liability for Forfeiture, File No. EB-00-TC-005, NAL/Acct. 
No. 200132170011.

     The Commission has taken this action under section 
201(b) of the Communications Act without ever conducting a 
rulemaking to establish the contours of that provision's 
applicability to common carrier advertising.  Moreover, as I 
have explained before, section 201(b) does not empower the 
Commission to regulate common carrier advertising.  This 
enforcement action is therefore illegal, and I urge the 
affected parties to seek judicial review of this decision.

     Background.  Although section 201(b) has been on the 
books for upwards of sixty-five years, the Commission first 
applied this provision to common carrier advertising in 
1998.  In a notice of apparent liability issued against a 
long-distance carrier that had slammed customers, the 
Commission concluded - without citing a single precedent - 
that a company's representations regarding its product also 
constituted ``unjust and unreasonable practices'' under 
section 201(b).  See Business Discount Plan, Inc., Notice of 
Apparent Liability for Forfeiture, 14 FCC Rcd 340 [¶ 29] 
(1998).  The Commission decided that the company ``knowingly 
misrepresented both its identity as a reseller and the 
nature of its service offering in an effort to 
[intentionally] mislead small business customers, who 
relied, to their detriment, on BDP's misrepresentations of 
these material facts.''  Id. [¶ 34].1  Beyond reciting the 
facts of that case, the Commission did not explain what it 
meant by the terms ``knowing misrepresentation,'' 
``detrimental reliance,'' or ``material facts.''

     The Commission followed up its action in Business 
Discount Plan with a policy statement entitled ``Joint 
FCC/FTC Policy Statement for the Advertising of Dial-Around 
and Other Long-Distance Services to Consumers,'' 15 FCC Rcd 
8654 (Mar. 1, 2000) (hereinafter ``Policy Statement'').  
There, the Commission acted though it had for years 
regulated common carrier advertising practices under section 
201(b), when in fact it had only ever explicitly addressed 
that issue in the Business Discount Plan dockets.2  See 
id. [¶ 4].  Borrowing from the FTC's truth-in-advertising 
rules, the Policy Statement explained if an advertisement 
makes an ``implied or express objective claim'' that 
``conveys a material representation to reasonable 
consumers,'' the advertisor must make sure the 
representation is true and be able to substantiate it.  
Id. [¶ 11].  Advertisements that might be ``misleading in 
the absence of qualifying or limiting information'' must 
contain ``any necessary disclosures,'' which must be ``clear 
and conspicuous.''  Id. [¶ 12].

     The Commission went on to set out what amounts to a 
detailed set of rules interpreting this standard and 
provided examples of advertisements that would be deceptive.  
Compliance with all of these requirements is mandatory:

     (1)  ``[A]dvertisers should exercise the greatest care 
        in ensuring the accuracy of their claims related to 
        price, including the clear and conspicuous 
        disclosure of information such as minimum per-call 
        charges, monthly fees, fees for additional minutes 
        beyond the initial calling period, and other 
        information that significantly affects the total 
        charge of a particular call or calling plan or 
        service,'' id. [¶ 13];
     (2)  ``[A]ny significant conditions or limitations on 
        the availability of the advertised rates should also 
        be clearly and conspicuously disclosed,'' id. 
        [¶ 14];
     (3)  ``[T]he advertiser should clearly and 
        conspicuously disclose whether the advertised 
        service includes in-state calls, and the fact that 
        such calls are charged at a higher rate if such is 
        the case,'' id. [¶ 15];
     (4)  ``Advertisers should . . . exercise care to 
        adequately explain phrases such as `basic rates' in 
        their ads. . . .  [W]hen making claims using such 
        terms as `basic rates' or `regular rates,' 
        advertisers should be mindful that those terms will 
        be evaluated from the point of view of the 
        reasonable consumer, and may be deceptive,'' id. 
        [¶ 16];
     (5)  ``By representing a competitor's rates, an 
        advertiser is making an implied claim that these 
        rates are reasonably current.  As in the case of any 
        other objective claim, the advertiser must have a 
        reasonable basis for this representation,'' id. 
        [¶ 17];
     (6)  ``The fact that information about significant 
        limitations or restrictions on advertised prices may 
        be available by calling a toll-free number or a 
        clicking on a Web site is generally insufficient to 
        cure an otherwise decptive price claim in 
        advertising,'' id. [¶ 18];
     (7)  ``To ensure that disclosures are effective, 
        advertisers should use clear and unambiguous 
        language, avoid small type, place any qualifying 
        information close to the claim being qualified, and 
        avoid making inconsistent statements or using 
        distracting elements that could undercut or 
        contradict the disclosure,'' id. [¶ 20];
     (8)  ``Disclosures that are large in size, are 
        emphasized through a sharply contrasting color, and, 
        in the case of television advertisements, remain 
        visible and/or audible for a sufficiently long 
        duration are likely to be more effective than those 
        lacking such prominence,'' id. [¶ 28];
     (9)  ``[T]he proximity and placement of disclosures are 
        important factors in determining whether they are 
        clear and conspicuous. . . The placement of 
        qualifying information away from the triggering 
        representation . . . reduces the effectiveness of 
        the disclosure.  Furthermore, when significant 
        qualifying information about the cost of a long-
        distance plan or service is necessary to prevent the 
        ad from misleading consumers, the user of an 
        asterisk will generally be considered insufficient 
        to draw a consumer's attention to a disclosure 
        placed elsewhere in an ad,'' id. [¶30];
     (10)        ``Even if a disclosure is large in size and 
        long in duration, other elements of an advertisement 
        may distract consumers so that they may fail to 
        notice the disclosure. . . . Advertisers should take 
        care not to undercut the effectiveness of 
        disclosures by placing them in competition with 
        other arresting elements of the ad,'' id. [¶ 31]; 
     (11)        ``[C]onsiderations specific to television 
        ads include volume, cadence, and placement of any 
        audio disclosures.  Disclosures generally are more 
        effective when they are made in the same mode 
        (visual or oral) in which the claim necessitating 
        the disclosure is presented,'' id. [¶32].

     Today, the Commission applies section 201(b) for the 
second time to a common carrier's advertising practices.  In 
contrast to the facts in Business Discount Plan, however, 
there are no allegations of slamming in this case.  Rather, 
the Commission bases its finding solely on its conclusion 
that the common carriers here used rate calculations that 
were ``complicated and confusing,'' see Notice of Apparent 
Liability ¶ 7, and that disclosures the carriers made 
regarding their promotional rates were inadequate, id. ¶ 13.  
Based on these determinations, the Commission concludes that 
each company is apparently liable for $500,000.

     The Commission's advertising rules have not been 
promulgated in accordance with the APA.  Even assuming that 
common carrier advertising were an appropriate concern of 
the Commission, the agency's rules regarding this issue have 
not been promulgated in accordance with the Administrative 
Procedure Act.  The Commission came up with a brand-new rule 
in a 1998 enforcement case, greatly expanded on that rule in 
a so-called ``policy statement,'' and now appears prepared 
to apply this expanded set of standards against common 
carriers generally.  Affected parties have never had an 
opportunity to weigh in on the matter.  I explain below why 
the APA does not permit the Commission to apply section 
201(b) to common carrier advertising without first 
conducting a rulemaking.

     1.  As an initial matter, it was inappropriate for the 
Commission to apply section 201(b) to common carrier 
advertising for the first time in an adjudication, as it did 
in Business Discount Plan.  The APA distinguishes between 
``rules'' and ``orders.''  A ``rule'' is ``an agency 
statement of general or particular applicability and future 
effect designed to implement, interpret, or prescribe law or 
policy or describing the organization, procedure, or 
practice requirements of an agency.''  5 U.S.C. § 551(4).  
Rulemaking is the ``agency process for formulating, 
amending, or repealing a rule,'' id. at §551(5), and the APA 
requires agencies to give public notice of a proposed 
rulemaking and give interested parties an opportunity to 
submit comments on the proposal, id. at § 553(b).   An 
``order,'' by contrast, is the ``whole or part of a final 
disposition . . . of an agency in a matter other than 
rulemaking,'' and it is formulated through ``adjudication.''  
Id. at § 551(6), (7).  Notice and comment are not required.  
Id. at § 554.  (Also exempt from the APA's notice and 
comment requirements are ``interpretive rules'' and 
``general statements of policy.''  Id. at § 553(d)(2).)

     The distinction between rulemaking and adjudication is 
fundamental:  ``[T]he entire Act is based upon a dichotomy 
between rule making and adjudication. . . . Rule making is 
agency action which regulates the future conduct of either 
groups of persons or a single person; it is essentially 
legislative in nature, not only because it operates in the 
future but also because it primarily concerned with policy 
considerations. . . . Conversely, adjudication is concerned 
with the determination of past and present rights and 
liabilities.''  Attorney General's Manual on the 
Administrative Procedure Act 13-13 (1947).

     Section 201(b) imposes on common carriers the immensely 
broad requirement that their ``charges, practices, 
classifications, and regulations'' be ``just and 
reasonable.''  47 U.S.C. § 201(b).  But the provision, by 
its plain language, does not authorize the Commission to 
define the scope of a common carrier's section 201(b) 
obligations through ad hoc adjudicatory proceedings.  
Rather, it directs the Commission to ``prescribe such rules 
and regulations as may be necessary in the public interest 
to carry out the provisions of this Act.''  Id. (emphasis 
added).  In other words, to support an action against a 
carrier based on an expanded or new understanding of section 
201(b), the plain language of the statute requires the 
Commission first to promulgate a rule, which can be adopted 
only after public notice and comment.  See American Mining 
Congress v. Mine Safety & Health Administration, 995 F.2d 
1106, 1109 (D.C. Cir. 1993) (noting that the Securities and 
Exchange Act of 1934 ``forbids nothing except acts or 
omissions to be spelled out by the Commission in `rules or 
regulations,''' and that ``clearly some agency creation of a 
duty is a necessary predicate to any enforcement against an 
[mine] operator [under 30 U.S.C. § 813(h)] for failure to 
keep records'').

     Even if the Commission were not precluded by section 
201(b)'s plain language from adopting new interpretations of 
the provision in an adjudication, policy reasons required it 
to define the contours of a common carrier's section 201(b) 
advertising obligations in a rulemaking.  As the Supreme 
Court, the federal appeals courts, and this agency itself 
have recognized, adjudication is most appropriate when an 
agency seeks incrementally to develop the law, rather than 
fundamentally change it.  For that reason, the Supreme Court 
has held that ``rulemaking is generally a better, fairer, 
and more effective method'' of announcing a new rule than ad 
hoc adjudication.  See Community Television of Southern 
California v. Gottfried, 459 U.S. 498, 511 (1983); see also 
Shell Offshore Inc. v. Babbitt, 238 F.3d 622, 627-28 (5th 
Cir. 2001); Pfaff v. Department of Housing & Urban 
Development, 88 F.3d 739, 748 (9th Cir. 1996) (``The 
disadvantage to adjudicative procedures is the lack of 
notice they provide to those subject to the agency's 
authority.  While some measure of retroactivity is inherent 
in any case-by-case development of the law, and is not 
inequitable per se, this problem grows more acute the 
further the new rule deviates from the one before it.  
Adjudication is best suited to incremental developments to 
the law, rather than great leaps forward.''); Curry v. 
Block, 738 F.2d 1556, 1563 (11th Cir. 1984); First 
Bancorporation v. Board of Governors, 728 F2d 434, 438 (10th 
Cir. 1984); National Small Shipment Traffic Conf. v. I.C.C., 
725 F.2d 1442, 1447- 48 (D.C. Cir. 1984) (``Trial-like 
procedures are particularly appropriate for retrospective 
determination of specific facts . . . [while] [n]otice-and-
comment procedures . . . are especially suited to 
determining legislative facts and policy of general, 
prospective applicability.'').  Even where an agency has 
discretion to announce a new rule in an adjudication, there 
are limits to this discretion.  ``Such a situation may 
present itself where the new standard, adopted by 
adjudication, departs radically from the agency's previous 
interpretation of the law, where the public has relied 
substantially and in good faith on the previous 
interpretation, where fines or damages are involved, and 
where the new standard is very broad and general in scope 
and prospective in application.''  See Pfaff, 88 F.3d at 748 
(citing NLRB v. Bell Aerospace Co., 416 U.S. at 267, 295 
(1974)) (emphasis added).

     The Commission itself has recognized that ``issues of 
general applicability are more suited to rulemaking than to 
adjudication,'' and numerous occasions it has refused to 
develop broad new rules in an adjudicatory context.  See 
Application of Alton Rainbow Corp. and Cox Radio, Memorandum 
Opinion & Order, 1999 WL 566130 [18] (1999) (``It is 
generally inappropriate to address this argument in a 
restricted adjudicatory proceeding, ``where third parties, 
including those with substantial stakes in the outcome, have 
had no opportunity to participate, and in which we, as a 
result, have not had the benefit of a full and well-
counseled record.''); Application of Great Empire 
Broadcasting, Inc. and Journal Broadcast Corp., Memorandum 
Opinion and Order, 14 FCC Rcd 11145 [¶ 8] (1999) (same); 
Rulemaking to Amend Parts 1, 2, 21, and 25 Of the 
Commission's Rules to Redesignate the 27.5-29.5 Ghz 
Frequency Band, to Reallocate the 29.5-30.0 Ghz Frequency 
Band, to Establish Rules and Policies for Local Multipoint 
Distribution Service and for Fixed Satellite Services, 
Second Report and Order, Order on Reconsideration, and Fifth 
Notice of Proposed Rulemaking, 12 FCC Rcd 12545 [¶¶ 388-90] 
(1997); Stockholders of Renaissance Communications Corp. and 
Tribune Co., Memorandum Opinion & Order, 12 FCC Rcd. 11866, 
11887-88 [¶ 50] (1997); Formulation of Policies And Rules 
Relating to Broadcast Renewal Applicants, Competing 
Applicants, and Other Participants to the Comparative 
Renewal Process and to the Prevention of Abuses of the 
Renewal Process, Second Further Notice of Inquiry and Notice 
of Proposed Rulemaking, 3 FCC Rcd 5179 (1988) (``[I]t is 
generally the view that such decisions are better left to 
the rulemaking process where all interested parties can 
participate.  `Rulemaking,' as the Supreme Court and the 
Court of Appeals have recognized, `is generally a better, 
fairer, and more effective method of implementing a new 
industrywide policy than is the uneven application of 
conditions in isolated renewal proceedings.'''); Nextel 
Communications Inc., Order, 14 FCC Rcd 11678 [¶ 31] (WTB 
1999) (declining to proceed through adjudication because to 
do so would be to establish spectrum policies of general 

     In light of these principles, what the Commission did 
in Business Discount Plan was illegitimate.  In an 
enforcement action against a single carrier, it set forth a 
broad new understanding of section 201(b), generally 
applicable on a going-forward basis to all common carrier 
advertising.  But section 201(b)'s plain language required 
it to conduct a rulemaking before it imposed this new 
obligation on a carrier.  And even assuming the agency had 
some discretion to apply a new interpretation of section 
201(b) in an enforcement action, that discretion is not 
unbounded.  Where fines and damages are involved, and the 
new standard is a broad from an agency's previous regulatory 
position, as was the case in Business Discount Plan, courts 
have held that adjudication is not a proper vehicle for 
announcing new law.

     2.  Not only was the Commission wrong in adopting a new 
rule regarding common carrier advertising in Business 
Discount Plan, it compounded the problem by expanding on 
that rule in what it labeled a ``policy statement.''  The 
agency's detailed description of the kinds of advertising 
practices that will violate section 201(b) is not a policy 
statement at all, but rather amounts to a set of substantive 
new rules, which are subject to the APA's notice and comment 
requirements.  Its attempt to enforce these rules here is 
therefore improper.

     The APA exempts ``policy statements'' and 
``interpretive rules'' from the statute's notice and comment 
requirements, 5 U.S.C. § 553 (b)(A), while all other rules - 
which the courts have often called ``substantive'' or 
``legislative'' rules - are subject to these provisions.  A 
quick review of these statutory distinctions is helpful.

     Although the precise difference between policy 
statements and interpretive rules is the subject of some 
dispute, see Appalachian Power Co. v. Environmental 
Protection Agency, 208 F.3d 1015, 1021 n.13 (D.C. Cir. 
2000), courts have observed that a policy statement ``does 
not seek to impose or elaborate or interpret a legal norm,'' 
but rather ``represents an agency position with respect to 
how it will treat - typically enforce - the governing legal 
norm.''  Syncor International Corp. v. Shalala, 127 F.3d 90, 
94 (1997) (emphasis added).  ``By issuing a policy 
statement, an agency simply lets the public know its current 
enforcement or adjudicatory approach. . . . Policy 
statements are binding on neither the public, nor the 
agency.''  Id. (citations omitted); see also United States 
Telephone Ass'n v. FCC, 28 F.3d 1232, 1234 (D.C. Cir. 1994) 
(``[T]he paradigm of a policy statement [is] an indication 
of an agency's current position on a particular regulatory 

     An interpretive rule, on the other hand, ``typically 
reflects an agency's construction of a statute that has been 
entrusted to the agency to administer.''  Id.  ``The legal 
norm is one that Congress has devised; the agency does not 
purport to modify that norm, in other words, to engage in 
lawmaking. . . . Instead, it is construing the product of 
congressional lawmaking `based on specific statutory 
provisions.'''  Id.  For these reasons, ```[t]he distinction 
between an interpretative and substantive rule . . . likely 
turns on how tightly the agency's interpretation is drawn 
linguistically from the actual language of the statute.'''  
Id.  (citing Paralyzed Veterans of American v. D.C. Arena 
L.P., 117 F.3d 579, 588 (D.C. Cir. 1997).

      Substantive rules, in contrast to both interpretive 
rules and policy statements, modify or add to a legal norm, 
based on the agency's own authority.  Id. at 95.  ``That 
authority flows from a congressional delegation to 
promulgate substantive rules, to engage in supplementary 
lawmaking.''  Id.  Because the agency is engaged in 
lawmaking, the APA requires it to comply with notice and 
comment.  Id.

     In determining whether an agency's exercise of 
regulatory authority qualifies as a substantive rule, courts 
begin with an examination of the applicable statute.  Where 
the authorizing statute is ``very general, using terms like 
`equitable' or `fair,' and the `interpretation' really 
provides all the guidance, then the latter will more likely 
be a substantive regulation, because then the agency's rule 
gives content to the legal norm in question.''  Id. at 94 
n.6 (citing Paralyzed Veterans, 117 F.3d at 588).  As the 
Seventh Circuit has explained:

     When Congress authorizes an agency to create standards, 
     it is delegating legislative authority, rather than 
     itself setting forth a standard which the agency might 
     then particularize through interpretation.  Put 
     differently, when a statute does not impose a duty on 
     the persons subject to it but instead authorizes (or 
     requires - it makes no difference) an agency to impose 
     a duty, the formulation of that duty becomes a 
     legislative task entrusted to the agency.  Provided 
     that a rule promulgated pursuant to such a delegation 
     is intended to bind, and not merely to be a tentative 
     statement of the agency's view, which would make it 
     just a policy statement, and not a rule at all, the 
     rule would be the clearest possible example of a 
     legislative rule, as to which the notice and comment 
     procedure . . . is mandatory.

Hoctor v. United States Dep't of Agriculture, 82 F.3d 165, 
169-70 (7th Cir. 1996) (emphasis added).

     Also important to the determination whether an agency 
publication amounts a substantive rule is whether it 
prescribes mandatory requirements.  See Syncor, 127 F.3d at 
95 (holding that an agency's decision is substantive if it 
uses language that is ``consistent only with the invocation 
of its general rulemaking authority to extend its regulatory 
reach.'').  In Syncor, for example, the court concluded that 
a ``notice'' issued by the Food and Drug Administration 
announcing that a certain category of radioactive drugs 
should comply with various statutory requirements was 
substantive.  Although the agency described this notice as a 
``policy statement'' and as ``guidance,'' the court ruled 
that the agency's statement that it had ``concluded'' that 
these drugs ``should be regulated'' amounted to 
fundamentally new regulation, which must be informed by 
notice and comment rulemaking.  Id.; see also Appalachian 
Power Co., 208 F.3d at 1023 (``[T]he entire Guidance, from 
beginning to end, reads like a ukase.  It commands, it 
requires, it orders, it dictates.  Throughout the guidance, 
EPA has given the States their `marching orders' and EPA 
expects the States to fall into line . . ..''); Sweet v. 
Sheahan, 235 F.3d 80, (2d Cir. 2000) (``Legislative [i.e., 
substantive] rules can impose obligations on members of the 
public distinct from, and in addition to, those imposed by 
statute.''); United States v. Picciotto, 875 F.2d 345, 348 
(D.C. Cir. 1989) (holding that rules that ``impose 
obligations'' are substantive, whereas rules that ``merely 
restate existing duties'' are interpretive).
     Applying these principles here, it is clear that the 
advertising guidelines set out in the Commission's so-called 
policy statement are substantive rules.  First, section 
201(b) is a classic example of a congressional delegation to 
an agency of lawmaking authority.  The provision requires 
only that a carrier's  ``charges, practices, 
classifications, and regulations'' be ``just and 
reasonable,'' leaving it to the agency to supply content to 
these enormously broad terms.  Despite what the Commission 
might say, it is certainly not obvious from the text of the 
statute that a carrier's ``practices'' necessarily include 
advertising.  Indeed, the word ``practices,'' standing 
alone, is so broad that it could include virtually any 
corporate practice.  Nor does the statute, on its face, tell 
us what ``just'' or ``reasonable'' mean.

     In its ``policy statement,'' the Commission gave new 
meaning to these terms, and in doing so, acted in its 
lawmaking capacity.   The agency informed carriers that 
their advertising practices would not meet the ``just and 
reasonable'' standard unless they ensured the accuracy of 
their price-related claims, including information regarding 
minimum per-call charges, monthly fees, fees for additional 
minutes beyond the initial calling period, geographic 
restrictions on rates, and comparative price claims.  Policy 
Statement ¶ 12-15.  The Commission also concluded that 
section 201(b)'s ``just and reasonable'' standard required 
advertisers ``clearly and conspicuously'' to disclose 
``qualifying information,'' and it explained in detail the 
form such disclosures should take.  See id.  ¶ 20-32. 

     These are plainly new requirements.  Even assuming that 
Business Discount Plan legitimately announced a new rule 
(which it did not), that case dealt only with a carrier's 
misrepresentations in the slamming context.  The carrier 
there told customers that it was a consolidated billing 
service and misled them into changing their long-distance 
carrier.  The most one may make of that case is that section 
201(b) applies to a carrier's illegal slamming conduct, 
precluding a carrier from misrepresenting to customers the 
type of service the carrier offers and from fraudulently 
inducing them to change their long-distance carrier.  
Business Discount Plan said nothing about the accuracy of 
price-related advertising or the need for ``clear and 
conspicuous'' disclosures, or any of the other issues the 
Commission addressed in its policy statement.

     A second sign that the Commission's ``policy 
statement'' is actually a set of substantive rules is the 
mandatory nature of these new requirements.  Section B, for 
example, is entitled ``Material Information that Should Be 
Disclosed in Advertisements for Long-Distance Calling 
Services.''  Each paragraph in Section B states that 
carriers ``should'' disclose specific pieces of pricing 
information, and carriers are informed that they ``should'' 
also ensure that these disclosures are ``clear and 

     In short, the Commission's so-called policy statement 
is a substantive rule in masquerade.  The agency created a 
new regime governing common carrier advertising, with legal 
consequences for common carriers.  It went far beyond 
whatever rule it created in Business Discount Plan.   The 
statement simply does not qualify as a mere interpretation 
of an existing rule or a statement of policy regarding the 
enforcement of governing law.  It is a substantive change in 
the law.  As such, it should have been promulgated in 
compliance with the APA's notice and comment rulemaking 
procedures.  It was not, and this enforcement action is 
therefore illegal.

     The Commission Lacks Jurisdiction to Regulate Common 
Carrier Advertising Under Section 201(b).  As I have written 
before, I do not believe Congress intended to delegate to 
the Commission the authority to regulate common carrier 
advertising.  See, e.g., Commission on the Verge of a 
Jurisdictional Breakdown:  The FCC and Its Quest to Regulate 
Advertising, 8 CommLaw Conspectus 219 (2000); Dissenting 
Statement, Joint FCC/FTC Policy Statement for the 
Advertising of Dial-Around and Other Long Distance Services 
to Consumers, 15 FCC Rcd 8654 (2000).  By specifically 
giving the Federal Trade Commission authority to regulate 
pay-per-call service advertising in the 1992 Telephone 
Disclosure and Dispute Resolution Act, Congress indicated 
that it did not think this Commission possessed general 
jurisdiction to regulate common carrier advertising.  In the 
preemption context, moreover, the federal courts have 
indicated that the Communications Act does not impose a duty 
on common carriers regarding advertising.  For these 
reasons, it is my view that the Commission lacks 
jurisdiction to regulate advertising.

                             * * * *

     Although it apparently thinks otherwise, this agency 
does not have unlimited authority to enforce against parties 
any standard of conduct it might think is appropriate.  If 
the Commission wishes to regulate common carrier advertising 
under section 201(b), it must put its proposed position out 
for comment and be prepared to justify whatever rule it 
fashions to the public and to the courts.  It has not done 
this here, and this enforcement action is therefore 
unlawful.  I dissent from this decision.


1 The Commission issued an order of forfeiture in the matter 
last July, 15 FCC Rcd 14,461 (2000), and denied a petition 
for reconsideration in December, 2000 WL 1785129 (Dec. 7, 

2 The Commission cited AT&T Card Issuer Identification 
Cards., Letter, 7 FCC Rcd. 7529 (1992), as standing for the 
proposition that it had previously ``found unfair and 
deceptive marketing practices by common carriers constitute 
unjust and unreasonable practices under section 201(b).''  
But that case did not squarely raise the section 201(b) 
issue.  It concerned statements that AT&T had made in 
literature sent to card holders, telling them that 
``government requirements'' required the company to issue 
new cards and asking them to destroy their old cards.  The 
Commission staff determined that the language might lead 
customers to destroy cards issued by companies affiliated 
with AT&T, and it sent a letter of admonishment to AT&T.  
But it never actually addressed the section 201(b) question, 
and the Commission's suggestion that the case supports its 
regulation of common carrier advertising under section 
201(b) is disingenuous.