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FCC Calls for Simpler Consumer Telephone Bills

Telecom: Agency also adopts new rules aimed at cutting international charges.


WASHINGTON — Moving to clean up phone bills that have confused and, some critics say, misled consumers for decades, federal regulators Thursday issued new rules requiring telephone companies to clarify their monthly charges.

The adoption of so-called Truth-in-Billing rules by the Federal Communications Commission is aimed at helping consumers spot fraudulent charges.

With long-distance carriers battling for customers, and with the rise of calling cards and other services submitted directly to carriers for collection rather than to customers, there has been an explosion of complaints about charges for phone services that were never ordered.

The FCC said it received about 30,000 such complaints last year. An additional 60,000 telephone subscribers contacted the FCC last year with questions about their phone bills.

The consumer uproar over having long-distance service switched or being charged for an unrequested service has focused attention on how poorly organized phone bills have remained for consumers while competition has forced phone companies to give businesses their bills in formats ranging from elaborate printouts to CD-ROMs or computer floppy disks.

Despite a proliferation of new fees, taxes and surcharges, most carriers haven't redesigned their bills for consumers in years.

Indeed, regulators expressed unhappiness with the phone industry's resorting to what FCC Chairman William E. Kennard called "fine-print gibberish." Instead, he said, carriers should try to clearly explain the new phone charges.

Kennard and other FCC officials say telephone carriers often mischaracterize federally mandated fees to pay for such things as universal phone service or improvements to the nation's telephone network. As a result, they say, consumers don't know what they are paying for.

"I couldn't figure out charges on my own phone bill," Kennard complained.

But some critics, including FCC Commissioner Harold Furchtgott-Roth and consumer groups, took issue with the agency's action.

Gene Kimmelman, co-director of the Washington office of Consumers Union, said the FCC should be focusing on eliminating fees rather than passing rules that give consumers "a better understanding of how they are getting ripped off."

Kimmelman added, "I think it's more meaningful to save people money than to simplify their phone bill."

Furchtgott-Roth, meanwhile, fears that the FCC, in moving to police the wording of telephone bills, is trampling the free-speech rights of telephone carriers.

Although FCC lawyers assured Furchtgott-Roth that the agency was well within its rights to regulate the wording of phone bills, the FCC commissioner cast the lone vote opposing the measure.

Under the new rules, telephone companies must flag a new long-distance provider if a customer is being billed by a different company. In addition, special charges for such services as calling cards and voice mail must be clearly explained, and a toll-free contact number provided so that a subscriber can quickly resolve any billing dispute.

A few telephone companies, such as Ameritech Corp., which serves the Midwest, have already begun pilot programs to streamline bills going to some customers. But it will take "several months" for the FCC rules to become final, said Lawrence E. Strickling, chief of the FCC's common-carrier bureau.

He said the agency will first solicit comment from the industry on using uniform labels to describe fees arising from federal regulations such as universal service, subscriber-line charges and special levies to pay for modernizing the phone network so users can keep their numbers when they switch local carriers. Only after that is accomplished, officials say, will the agency enforce the new rules.

In the meantime, consumers can file a complaint with the FCC if they think a bill is misleading or confusing. After the rules are made final, telephone companies will be subject to fines and other sanctions.

Though they are the fastest-growing phone service, with 73 million customers, wireless phone companies, such as AirTouch Communications Inc. and Nextel Communications Inc. will be exempt from many of the new rules.

Wireless carriers won't be required to identify specific charges or spell out when phone service will be cut off if a bill isn't paid. The FCC is seeking comments on whether to extend those rules to wireless companies in the future.

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