Before the

**FEDERAL COMMUNICATIONS COMMISSION**

**Washington, D.C. 20554**

In the Matter of ) **CORRECTED**

)

Joint FCC/FTC Policy Statement ) File No. 00-EB-TCD-1(PS)

For the Advertising of Dial-Around )

And Other Long-Distance Services )

To Consumers )

# POLICY STATEMENT

Adopted by the FCC: February 29, 2000 Released: March 1, 2000

Adopted by the FTC: February 23, 2000

> By the Commissions: Commissioner Furchtgott-Roth dissenting and
> issuing a separate statement.

## I. INTRODUCTION

1.  In recent years there has been an explosion in competition and
    innovation in the telecommunications industry. Long-distance
    customers have reaped substantial benefits in the form of greater
    choice in deciding which carrier to use and a greater diversity in
    the prices charged for those calls. For example, dial-around (or
    "10-10") numbers allow consumers to bypass or "dial-around" their
    chosen long-distance carrier to get a better rate in certain
    circumstances. Consumers also can opt for calling plans that offer a
    fixed per-minute rate during certain hours or on particular days.

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2.  Numerous carriers, both large and small, promote their services
    through national television, print, and direct mail advertising
    campaigns. Because no one plan is right for everyone, advertising
    plays a critical role in informing consumers about the myriad
    choices in long-distance calling and, in the case of dial-around
    services, advertising is generally the only source of information
    consumers typically have before incurring charges. With accurate
    information, consumers benefit from being able to choose the
    particular carrier that meets their long-distance calling needs at
    the most economical price. However, if consumers are deceived by the
    advertising claims, they cannot make informed purchasing decisions
    and ultimately the growth of competition in the long-distance market
    will be stifled.

3.  The proliferation of advertisements for dial-around numbers,
    long-distance calling plans, and other new telecommunications
    services, as well as an increase in the number of complaints
    regarding how these services are promoted, have raised questions
    about how the principles of truthful advertising apply in this
    dynamic marketplace. To address these questions the Federal Trade
    Commission and the Federal Communications Commission issue this
    Joint Policy Statement.

4.  Section 201(b) of the Communications Act of 1934, as amended,
    requires that common carriers' "practices . . . for and in
    connection with . . . communications service, shall be just and
    reasonable, and any such . . . practice . . . that is unjust or
    unreasonable is hereby declared to be unlawful . . .".[^1] The FCC
    has found that unfair and deceptive marketing practices by common
    carriers constitute unjust and unreasonable practices under section
    201(b).[^2] Principles of truth-in-advertising law developed by the
    FTC under Section 5 of the FTC Act[^3] provide helpful guidance to
    carriers regarding how to comply with section 201(b) of the
    Communications Act in this context.

5.  The FTC's truth‑in‑advertising law can be boiled down to two
    common‑sense propositions: 1) advertising must be truthful and not
    misleading; and 2) before disseminating an ad, advertisers must have
    adequate substantiation for all objective product claims.[^4] A
    deceptive ad is one that contains a misrepresentation or omission
    that is likely to mislead consumers acting reasonably under the
    circumstances about a material fact.[^5] Material facts are those
    that are important to a consumer's decision to buy or use a product.
    Information pertaining to the central characteristics of the product
    or service is presumed material. The cost of a product or service is
    an example of an attribute presumed material.[^6]

6.  Advertisers are responsible for substantiating all objective express
    and implied claims that an ad conveys to reasonable consumers,
    regardless of whether the advertiser intended to convey those
    claims. In determining the claims that an ad conveys, the FTC looks
    to the "net impression" conveyed to consumers---often described as
    "the entire mosaic, rather than each tile separately."[^7] Even if
    the wording of an ad may be literally truthful, the net impression
    conveyed to consumers may still be misleading. The entire
    advertisement, transaction or course of dealing will be considered.
    The issue is whether the act or practice is likely to mislead,
    rather than whether it causes actual deception.

7.  An ad may be deceptive by omission. For example, an ad may be
    deceptive if it fails to disclose qualifying information that, in
    light of the representations made, would be necessary to prevent
    consumers from being misled. The failure to disclose is examined in
    light of expectations and understandings of the typical buyer
    regarding the claims made.[^8]

8.  In many circumstances, reasonable consumers do not read the entirety
    of an ad or are directed away from the importance of the qualifying
    phrase by the acts or statements of the seller. Depending on the
    circumstances, accurate information in the text may not remedy a
    misleading impression created by a headline because reasonable
    consumers may glance only at the headline. Written disclosures in
    fine print may be insufficient to correct a misleading impression.
    Legalistic disclaimers too complex for consumers to understand may
    not cure otherwise deceptive messages or practices. Qualifying
    disclosures must be legible and understandable. The totality of the
    ad or the practice must be evaluated with questions such as: How
    clear is the representation? How conspicuous is any qualifying
    information? How important is the omitted information? Do other
    sources for the omitted information exist? How familiar is the
    public with the product or service?

9.  At the outset, it is important to note that these fundamental
    principles apply across the board. For example, a misrepresentation
    or omission of material information in an advertisement for a
    dial-around service would likely be deceptive if the same
    misrepresentation or omission occurred in an ad for a long‑distance
    calling plan. Furthermore, the same standards of truthfulness apply
    regardless of the medium advertisers choose to communicate their
    message to consumers. Although the most effective method for
    disclosing information to consumers may vary depending on the
    medium, the principles of truth and accuracy apply to advertisements
    conveyed via television, radio, magazines, newspapers, direct mail,
    telemarketing, the Internet, or oral representations made by
    customer service operators.[^9]

10. In issuing this Policy Statement, the FCC and the FTC hope to
    provide guidance for carriers who market long-distance service. As a
    matter of clarification, we note that this Policy Statement does not
    preempt existing state law.

## II. DISCUSSION

### **MISREPRESENTATIONS IN ADVERTISEMENTS FOR LONG-DISTANCE CALLING SERVICES**

11. As a general matter, advertisers are free to highlight whatever
    attribute of their products or services they choose---quality,
    convenience, customer service, availability, price, or other
    benefit. However, once an advertisement makes an implied or express
    objective claim that conveys a material representation to reasonable
    consumers, the advertiser is responsible for the truthfulness of the
    representation and for substantiating the representation, regardless
    of whether the advertiser intended to convey those messages to
    consumers. If a claim is false, a disclosure that provides
    contradictory information is unlikely to cure the deception.

> **[Example \# 1]{.underline}:** The headline of a direct mail ad for a
> dial‑around service reads, "All day. All night. All calls. 10¢ a
> minute." In fact, the rate is applicable only for state-to-state calls
> after 7:00 p.m. and on weekends. Even an otherwise prominent
> disclosure to that effect will likely not be sufficient considering
> that the disclosure directly contradicts the express, and false,
> representations in the headline.

### **MATERIAL INFORMATION THAT SHOULD BE DISCLOSED IN ADVERTISEMENTS FOR LONG‑DISTANCE CALLING SERVICES**

12. In situations where an advertisement makes claims that are not
    directly false but might be misleading in the absence of qualifying
    or limiting information, advertisers are responsible both for making
    any necessary disclosures and for ensuring that they are clear and
    conspicuous. The following are some of the types of disclosures that
    may be necessary to prevent price claims in long‑distance telephone
    advertising from deceiving customers.

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1.  **[Minimum Per-Call Charges, Monthly Fees, And Other Cost-Related
    Information]{.underline}**

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13. The central characteristic touted in most long-distance advertising
    is price. As noted above, price representations are presumptively
    material to consumers. What matters to consumers is not just the
    per-minute rate, but rather how that rate, along with all additional
    fees and charges, will ultimately be reflected in the charges they
    see on their monthly phone bills.[^10] Therefore, advertisers should
    exercise the greatest care in ensuring the accuracy of their claims
    related to price, including the clear and conspicuous
    disclosure[^11] 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.

> **[Example #2 \-- Minimum Charges]{.underline}:** An advertisement
> conveys the message that long-distance calls cost 10¢ a minute. In
> fact, all calls are subject to a 50¢ minimum charge. Given that
> reasonable consumers would likely conclude from the "10¢ a minute"
> representation that a one‑minute call would cost 10¢, and would not
> expect there to be a substantial additional charge, the advertiser's
> failure to clearly and conspicuously disclose the minimum fee in the
> ad would likely be deceptive.
>
> **[Example #3 \-- Monthly Fees]{.underline}:** An advertisement says
> that long-distance calls cost 10¢ a minute. In fact, that rate is only
> available if customers pay a \$5.95 monthly fee. Because the
> imposition of the monthly fee would significantly increase the
> consumer's per-minute charge, the advertiser's failure to clearly and
> conspicuously disclose the monthly fee in the ad would likely be
> deceptive.
>
> **[Example #4 \-- Cost After Initial Promoted Calling
> Period]{.underline}:** A company advertises "all calls up to 20
> minutes for only \$1.00," but charges 10¢ for each additional minute.
> Consumers are likely to be misled by the affirmative claim in the
> absence of a disclosure about the significantly higher rate after 20
> minutes. Because many consumers will make calls that last longer than
> 20 minutes, the cost of each minute beyond the first 20 minutes'
> duration of a call is information that likely would be material to
> consumers considering whether to use the service. Thus, the
> advertiser's failure to clearly and conspicuously disclose in the ad
> the per-minute rate for calls longer than the initial calling period
> would likely be deceptive.

2.  **[Time Restrictions or Limitations on the Availability of the
    Advertised Rate]{.underline}**

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14. Given the importance of price information, any significant
    conditions or limitations on the availability of the advertised
    rates should also be clearly and conspicuously disclosed. Examples
    of such restrictions would include limitations on the time of day or
    day of the week that the rate applies or the fact that the rate is
    good only during a limited promotional or sale period.

> **[Example #5 \-- Time Restrictions]{.underline}:** A company's
> advertisements prominently feature the phrase "10¢ a minute." In fact,
> the 10¢ a minute rate is good only between 7:00 p.m. and 7:00 a.m.
> Consumers are likely to view this time limitation as a significant
> restriction on the availability of the advertised 10¢ a minute rate.
> The advertiser's failure to clearly and conspicuously disclose the
> limited hours in the ad would likely be deceptive.
>
> **[Example #6 \-- Promotional Rates]{.underline}:** A company's
> advertisements prominently feature the phrase "5¢ a minute." Peel-off
> stickers, intended to be placed on the phone, featuring the "5¢ a
> minute" offer accompany the advertisement. In fact, the 5¢ a minute
> rate is a special promotional offer good only for 60 days. Consumers
> are likely to view the limited duration of the 5¢ a minute rate as a
> significant qualification. The advertiser's failure to clearly and
> conspicuously disclose this limitation in the ad would likely be
> deceptive. Furthermore, in this instance, the use of peel‑off stickers
> advertising the 5¢ a minute rate without adequate disclosure of the
> limited duration of the offer would likely be deceptive because the
> stickers would remain on consumers' telephones long after the
> promotional rate had expired.

3.  **[Geographic Restrictions]{.underline}**

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15. Another important qualification that would likely be material to
    consumers and necessary to disclose to avoid deception is a
    significant geographic restriction on the applicability of an
    advertised rate. For example, many long-distance services and plans
    are limited to state-to-state calls. The disclosure of this
    information is particularly important because in-state long-distance
    rates are often substantially more expensive than state-to-state
    rates, a fact that may be surprising and significant to reasonable
    consumers. Where reasonable consumers may be deceived about such
    significant differences in price between in-state and state-to-state
    calls, the 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.

> **[Example #7 \-- Geographic Restrictions]{.underline}:** A company
> advertises a "10¢ a minute" rate. In fact, that rate is good only for
> state-to-state calls, and in-state calls may be charged at a
> significantly higher rate. The failure to clearly and conspicuously
> disclose in the ad, for example, that "in state rates may be higher,"
> would likely be deceptive.

4.  **[The Use of the Phrase "Basic Rates"]{.underline}**

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16. Advertisers should also exercise care to adequately explain phrases
    such as "basic rates" in their ads. The meaning of an ad is
    evaluated from the point of view of the "reasonable consumer"---the
    typical person looking at the ad. A telecommunications professional
    may understand the term "basic rate" to refer to a specific class of
    tariffed service, which may be billed at the most expensive rates.
    However, the typical consumer would likely interpret the phrase
    differently, concluding that it refers to the discounted rates he or
    she is normally charged by his or her selected carrier. Therefore,
    when 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.

> **[Example #8 \-- "Basic Rates"]{.underline}:** A company offers
> consumers a directory assistance service for 99¢. According to the
> television ad, callers who use this service can be connected to the
> requested number at no additional charge. In fact, consumers who opt
> to be connected to the requested number are connected via the
> advertiser's network and are billed at the advertiser's expensive
> per-minute rates. This information is disclosed only by a superscript
> reading "basic rates apply." Reasonable consumers would expect to pay
> the promoted 99¢ charge, but would not likely expect to pay a charge
> greater than the amount their selected long-distance carrier would
> charge for a call to the requested number. Because the consumer will
> be charged a rate higher than the consumer's presubscribed rate, use
> of the term "basic rates apply," even if clearly and conspicuously
> disclosed, would not likely be sufficient to avoid deception. The
> advertiser's failure to disclose that the consumer will be charged a
> rate higher than the consumer's presubscribed rate would likely be
> deceptive.

5.  **[Comparative Price Claims]{.underline}**

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17. A technique commonly employed in long-distance advertising is the
    comparison of an advertiser's price to the prices of its
    competitors. 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. The time elapsing between
    the creation of an ad and the distribution of the ad to the public
    may vary, depending upon the medium in which the ad appears. This is
    a consideration in determining whether an advertiser possesses a
    reasonable basis for a claim that compared rates are reasonably
    current.

> **[Example #9 \-- Comparative Price Claims]{.underline}:** In an
> advertisement in a daily newspaper, an advertiser conveys the message
> that its rates are the lowest, using a chart that compares its
> per-minute rate to the rates offered by two competitors. The stated
> rates of one of the competitors are three months old, and the stated
> rate of the other is eight months old. By representing the
> competitors' rates, the advertiser is implying that those rates are
> reasonably current. If the information upon which the ad is based is
> outdated and the rates have changed materially, the ad would likely be
> deceptive.
>
> **[Example #10 ‑‑ Comparative Price Claims]{.underline}:** An
> advertisement in a monthly magazine states that the advertiser's rates
> are better than those of another competitor. In January the advertiser
> verified that the competitor was offering the rate as stated in the
> ad. When the ad is published in February, it clearly and conspicuously
> discloses that the competitor's rate is as of January of this year.
> This disclosure is likely to be sufficient to avoid deception.

6.  **[The Effect of the Use of Toll-Free Numbers]{.underline}**

> **[and Other Alternate Sources of Information]{.underline}**

18. 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 deceptive price claim in
    advertising. Advertisers are encouraged to use customer service
    numbers and Internet sites to offer consumers more information, but
    these sources cannot cure misleading information in the ad
    itself.[^12]

19. Dial-around services are unique in that consumers typically incur
    charges for using them before receiving any information other than
    what is conveyed in the dial-around service's advertising. This
    underscores the importance that significant restrictions and
    limitations on price claims be disclosed in the ad itself; users of
    those services must rely on the information contained in the ad as
    the basis for determining whether to choose a particular service.
    However, even if the use of an advertised service requires a
    consumer to interact further with the advertiser---for example, if a
    consumer must call a toll-free customer service number to switch to
    a different calling plan---it would still be deceptive if the
    advertisement failed to disclose significant restrictions necessary
    to qualify representations made in the ad.

> **[Example #11 \-- Use of Toll-Free Numbers]{.underline}:** A
> television advertisement for a long-distance calling plan prominently
> features the phrase "10¢ a minute" as a graphic and in the narration
> read by the spokesperson. The ad gives a toll-free number and tells
> consumers "call now to switch." In fact, the 10¢ a minute rate is good
> only between 7:00 p.m. and 7:00 a.m. The inclusion of a superscript
> that reads "call for restrictions" would not likely be effective to
> qualify the claim.

### **PRINCIPLES RELATED TO THE CLEAR AND CONSPICUOUS DISCLOSURE OF MATERIAL INFORMATION IN ADVERTISEMENTS FOR LONG‑DISTANCE CALLING SERVICES**

20. When the disclosure of qualifying information is necessary to
    prevent an ad from being deceptive, that information should be
    presented clearly and prominently so that it is actually noticed and
    understood by consumers. Disclosures should be effectively
    communicated to consumers. A fine-print disclosure at the bottom of
    a print ad, a disclaimer buried in a body of text unrelated to the
    claim being qualified, a brief video superscript in a television ad,
    or a disclaimer that is easily missed on an Internet Web site is not
    likely to be effective. 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.

21. In some cases, the FTC has specified the precise fashion in which
    qualifying disclosures must be conveyed.[^13] However, more
    frequently, the FTC has used the term "clear and conspicuous" to
    describe a general performance standard flexible enough to take into
    account both the consumer's right to accurate information necessary
    to make an informed purchase decision and the many ways that
    creative advertisers can effectively convey that information.[^14]
    Because the FTC considers the disclosure in the context of all of
    the elements of the ad, the focus is not on the wording of the
    specific disclosure in isolation, but rather on the overall or "net"
    impression that the entire advertisement---including the
    disclosure---conveys to reasonable consumers.[^15]

22. Ordinarily, a disclosure is "clear and conspicuous," and therefore
    is effectively communicated, when it is displayed in a manner that
    is readily noticeable, readable and/or audible, and understandable
    to the audience to whom it is disseminated. Factors that the FTC
    considers in evaluating the effectiveness of disclosures include:

-   ***the prominence of the qualifying information***, especially in
    comparison to the advertising representation itself;

-   **the proximity and placement of the qualifying information**
    vis-a-vis the representation that it modifies;

-   ***the absence of distracting elements***, such as text, graphics,
    or sound that may distract a consumer's attention away from the
    disclosure; and

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-   ***the clarity and understandability of the text of the
    disclosure.***[^16]

23. Reference to an existing regulatory scheme provides considerable
    guidance. In 1992 Congress passed the Telephone Disclosure and
    Dispute Resolution Act ("TDDRA"), directing the FCC and the FTC to
    issue regulations governing, among other things, the advertising and
    marketing of pay-per-call services. TDDRA was enacted in response to
    a history of fraudulent or abusive practices. In adopting its
    Pay-Per-Call Rule (previously called the 900-Number Rule),[^17] the
    FTC provided very specific provisions on how to make effective
    disclosures of material cost information in the context of
    advertising telephone-based entertainment or information programs
    that are billed to consumers' telephone bills. The basic principles
    embodied in the advertising provisions of the Rule show how the FTC
    determines whether a particular disclosure of cost information is
    clear and conspicuous in the context of advertising for pay-per-call
    services. According to the Rule's provisions governing the
    advertising of those services, the provider must "clearly and
    conspicuously" disclose in the advertisement the total cost of the
    call. If there is a flat fee for the call, the ad must state the
    total cost. If the call is billed on a time‑sensitive basis, the ad
    must state "the cost per minute and any minimum charges." If the
    call is billed on a variable rate basis, the ad must state the cost
    of the initial portion of the call, any minimum charges, and the
    range of rates that may be charged for the service including any
    other fees that will be charged for the service. Regardless of how
    the service is billed, the Rule requires that "the advertisement
    shall disclose any other fees that will be charged for the service."

24. To ensure that consumers understand the central factor in the
    transaction---the cost of the call---the Rule specifies that all
    necessary disclosures must be made clearly and conspicuously.
    Initially, the Rule specifies that these disclosures must be made in
    the same language as the advertisement; for print disclosures, "in a
    color or shade that readily contrasts with the background of the
    ad"; and for oral disclosures, "in a slow and deliberate manner and
    in a reasonably understandable volume." However, the Rule outlines
    with more specificity the required type size of these disclosures,
    their proximity to the triggering information, and the necessity of
    both oral and visual disclosures for television ads.

25. In print advertisements, the FTC Rule requires:

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1)  that the cost of the call shall be placed adjacent to each
    presentation of the pay‑per‑call number; and

> 2\) that each letter or numeral of any necessary price disclosures
> shall be, "at a minimum, one‑half the size of each letter or numeral
> of the pay‑per‑call number to which the disclosure is adjacent."

26. For television advertisements, the FTC Rule requires:

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1)  that a visual disclosure shall appear adjacent to each visual
    presentation of the pay-per-call number;

2)  that each letter or numeral of any necessary price disclosures shall
    be, "at a minimum, one‑half the size of each letter or numeral of
    the pay‑per‑call number to which the disclosure is adjacent;"

3)  that a visual disclosure shall appear on the screen for the duration
    of the presentation of the pay-per-call number; and

> 4\) that an oral disclosure shall be made at least once,
> simultaneously with a visual presentation of the disclosure.

27. The measures that the FTC thought were necessary to ensure that cost
    disclosures were clear and conspicuous in the context of
    pay-per-call services---the prominent disclosure of important cost
    information adjacent to the central feature of the ad---are
    certainly relevant to price advertising by dial-around services and
    long-distance calling plans. While not every single aspect of the
    Rule may be appropriate or required to ensure truthful, nondeceptive
    advertising by the long-distance telephone industry, the Rule
    nonetheless offers guidance and a set of "best practices" to
    advertisers of dial-around and other long-distance telephone
    services.

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1.  **[Prominence]{.underline}**

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28. 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. The
    FTC's experience consistently demonstrates that fine‑print footnotes
    and brief video superscripts are often overlooked. For example, in
    concluding that a television superscript was insufficiently clear
    and conspicuous to qualify a nutritional claim in a food ad, the FTC
    stated, "\[g\]enerally recognized marketing principles suggest that,
    given the distracting visual and audio elements and the brief
    appearance of the complex superscript in the middle of the
    commercial, it is unlikely that the visual disclosure is effective
    as a corrective measure."[^18]

29. The FTC's analysis focuses not just on whether the type size of the
    disclosure is large enough to be *readable* when read in isolation,
    but rather whether the disclosure itself is prominent enough so that
    typical consumers will actually *read* and *understand* it in the
    context of an actual ad. Although the FTC has not, as a general
    rule, required disclosures to be identical in size and repeated the
    same number of times as the triggering representation, substantial
    disparities between the two reduce the likelihood that a disclosure
    will be clear and conspicuous.

> **[Example \# 12]{.underline}:** In a full‑page newspaper ad for a
> long-distance calling plan, the phrase "10¢ a minute" appears in
> 70-point type at the top of the page. In fact, the advertised 10¢ a
> minute rate applies only with a \$3.95 monthly fee. The fee is
> disclosed in the body of the ad in 12‑point type. Given the disparity
> in type size between the "10¢ a minute" claim and the \$3.95 monthly
> fee, it is unlikely that the
>
> disclosure of the monthly fee is sufficiently clear and conspicuous to
> avoid deception.
>
> **[Example \# 13]{.underline}:** In a 30‑second television ad for a
> dial-around service, the phrase "10¢ a minute" is used four times by
> the narrator and appears as a graphic twice. A superscript appearing
> on the bottom of the screen for three seconds reads "Rate available
> from 7:00 p.m. until 7:00 a.m., Monday through Friday and all day
> weekends." In fact, calls before 7:00 p.m. cost 25¢ per minute. Given
> the prominence of the "10¢ a minute" claim and the complexity and
> small print of the superscript, it is unlikely that the disclosure of
> the time restrictions is sufficiently clear and conspicuous to avoid
> deception.
>
> **[Example \# 14]{.underline}:** In a full‑page newspaper ad for a
> long-distance calling plan, the phrase "10¢ a minute" appears in
> 70-point type at the top of the page. Immediately under it, the phrase
> "plus \$3.95 monthly fee" appears in 35-point type. Given the
> proportional similarity in type size between the "10¢ a minute" claim
> and the \$3.95 monthly fee and their proximity, the disclosure of the
> monthly fee is likely to be sufficient to avoid deception.

2.  **[Proximity and Placement]{.underline}**

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30. In addition to their size and duration, the proximity and placement
    of disclosures are important factors in determining whether they are
    clear and conspicuous. The effectiveness of disclosures is
    ordinarily enhanced by their proximity to the representation they
    qualify, because reasonable consumers do not necessarily read an ad
    in its entirety.[^19] The placement of qualifying information away
    from the triggering representation---for example, in footnotes, in
    margins, or on a separate page of a multi-page promotion---reduces
    the effectiveness of the disclosure.[^20] 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 use of an asterisk will generally be considered
    insufficient to draw a consumer's attention to a disclosure placed
    elsewhere in an ad.[^21]

> **[Example #15]{.underline}:** A full-page newspaper advertisement for
> a company's long-distance calling plan features in 70-point type the
> statement, "7¢ a minute all the time" followed by an asterisk. A
> 12-point disclosure at the bottom of the page states, "\*\$5.95
> monthly fee applies." Given the disparity in prominence and location
> between the two lines of text, it is unlikely that the disclosure of
> the monthly fee is sufficiently clear and conspicuous.
>
> **[Example \# 16]{.underline}:** A dial-around company promotes its
> services via a three-page direct mail letter sent to consumers. The
> envelope includes a depiction of a nickel surrounded by the phrase
> "long-distance calls for just 5¢ a minute," a depiction repeated on
> the first page of the letter. In fact, the 5¢ a minute rate is good
> only for state-to-state calls 20 minutes or longer. That information
> is prominently disclosed only on the last page of the letter. The
> disclosure of these material conditions on the third page of the
> letter would likely be ineffective.
>
> **[Example \# 17]{.underline}:** In a 60-second television ad, a
> company wants to promote both its domestic and international
> dial-around service. In the first 50 seconds of the ad, the
> spokesperson refers to the company's rate as "7¢ a minute" three times
> with an accompanying graphic. In the last 10 seconds of the ad, the
> spokesperson says, "And call 878-555-0000 to find out about our low
> international rates." During the 10-second segment in which the
> spokesperson discusses the company's international rates, the
> superscript appears "7¢ a minute rate applies after 7:00 p.m.
> Monday-Friday and all day weekends." Given the lack of proximity
> between the "7¢ a minute" claim and the disclosure of the material
> time restriction, the superscript would likely not be considered clear
> and conspicuous.
>
> **[Example \# 18]{.underline}:** A company wants to promote its
> international long‑distance service by reducing its regular prices
> during a special promotional period. The print ad features the
> prominent headline, "Big holiday sale! Call between November 1, 2000,
> and December 31, 2000, and save on all international calls." The ad
> also features a box listing ten foreign cities. The list, prominently
> headed "sale prices good through December 31, 2000" gives the cost per
> minute to each of the advertised cities. Considering the close
> proximity between the promotional per-minute rates and the prominently
> displayed information that the advertised rates are good only until
> December 31, 2000, the disclosure would likely be effective.

3.  **[Absence of Distracting Elements]{.underline}**

```{=html}
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```
31. 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. As the FTC has held, consumers may be
    "directed away from the importance of the qualifying phrase by the
    acts or statements of the seller."[^22] Advertisers should take care
    not to undercut the effectiveness of disclosures by placing them in
    competition with other arresting elements of the ad.

> **[Example #19]{.underline}:** A 30‑second television advertisement
> for a dial‑around service features a famous movie star as a
> spokesperson. On three occasions, the celebrity states that calls
> completed through this service cost 10¢ a minute. The ad closes with a
> quick‑cut montage of the celebrity talking on the telephone in front
> of the Grand Canyon, Niagara Falls, Golden Gate Bridge, and other
> visually arresting national landmarks. In fact, calls are subject to a
> 50¢ minimum. This information is disclosed only through a visual
> superscript appearing at the bottom of the screen during the montage.
> Given the likelihood that consumers will focus on the quick-cut
> montage rather than on the superscript, it is unlikely that the
> disclosure would be considered clear and conspicuous.

4.  **[Factors Relating Specifically to Television Ads]{.underline}**

```{=html}
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```
32. In television ads, the same factors of prominence, proximity, and
    absence of distractions determine whether material information is
    disclosed in a manner that consumers notice and understand. Other
    considerations specific to television ads include volume, cadence,
    and placement of any audio disclosures.[^23] 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.
    Furthermore, research suggests that disclosures that are made
    simultaneously in both visual and audio modes generally are more
    effectively communicated than disclosures made in either mode
    alone.[^24] For example, the FTC's Pay-Per-Call Rule requires that
    the price of a call to a 900‑number service be disclosed in both the
    video and audio in a television ad. Thus, for television ads for
    long-distance services, a disclosure that includes both a
    sufficiently large superscript and a voice-over statement is likely
    to be more effective than a superscript alone.

> **[Example #20]{.underline}:** A 30-second television advertisement
> for a long‑distance calling plan features a spokesperson who on three
> occasions states that calls on the plan are "10¢ a minute anytime." In
> addition, a graphic reading "10¢ a minute anytime" is depicted twice
> during the ad. In fact, the 10¢ a minute rate requires the payment of
> a \$5.95 monthly fee. The only disclosure of the monthly fee is
> through a visual superscript at the end of the ad. Especially because
> the triggering representation---that calls on the plan are "10¢ a
> minute anytime"---was made both orally and visually, the visual
> superscript would likely be less effective in disclosing the monthly
> fee than had the same information been conveyed both orally and
> visually.

## III. ORDERING CLAUSE

33. Accordingly, IT IS ORDERED THAT this Policy Statement IS ADOPTED.

### FEDERAL COMMUNICATIONS COMMISSION

Magalie Roman Salas

Secretary

FEDERAL TRADE COMMISSION

Donald S. Clark

Secretary

**DISSENTING STATEMENT OF COMMISSIONER HAROLD FURCHTGOTT-ROTH**

*Re: Joint FCC/FTC Policy Statement for the Advertising of Dial-Around
and Other Long Distance Services to Consumers File No. (Rel. March 1,
2000).*

Today's action marks another unfortunate stop in the majority's
self-defined jurisdictional mission to "do good." Regardless of how
tenuous our statutory authority may be, or the potential adverse
collateral consequences, the majority boldly goes where no Commission
has gone before in an effort to "do good." Such an agile jurisdictional
approach makes it politically difficult to dissent. Needless to say, I
am not against doing "good." More specifically, I am not against efforts
to eliminate fraudulent or misleading advertising. Yet our inquiry
simply cannot stop with whether we are doing "good"\-- to do so would be
to abdicate our responsibility to the American people. We were hired to
do a pretty daunting job: administer and enforce the Communications Act.
When we act outside our job description, our "moonlighting" is not only
questionable as a matter of law, it shortchanges the American people on
the job they hired us to do.

**An Effort to Do Good**

Certain carriers' marketing may be confusing, misleading, or even
fraudulent. I share the desire to see this advertising curtailed. I also
understand that the Federal Trade Commission lacks authority over
advertising practices by certain industries, including common carriers,
under 15 U.S.C. §§ 45, 46[^25] 1 In light of the perceived problem and
the lack of FTC authority, the majority is responding to a perceived
"gap" in federal regulatory authority over common carrier advertising.
However, it is not obvious that this "gap" is filled by the plain
language of the Communications Act. It is possible that there are many
instances when pressing issues are not addressed by current federal law.
But it is the exclusive responsibility of Congress, not the FCC, to
assess these issues and to fill in any "gaps" by changing the law.

**The FCC's Tenuous Jurisdiction Over Advertising**

The Statement asserts FCC authority over advertising based on 47 U.S.C.
§ 201(b). That Section "requires that common carriers' practices . . .
for and in connection with . . . communication service, shall be just
and reasonable . . . ." The Statement then contends that advertising
qualifies as a "practice" under the statute. As an initial matter, the
plain meaning of the term "practices" taken in the context of Section
201 does not clearly reach advertising. This is particularly true in
light of Congress' ability and practice of crafting explicit
"advertising" jurisdiction over common carrier services when its desires
such jurisdiction. For example, Congress has specifically granted the
FTC jurisdiction over "advertisement\[s\] for pay-per-call
services.[^26] 2 In the end, if the majority reads "practices" to
include advertising, it is difficult to discern what the term does not
include. For example, are telephone company labor and employment
policies "practices" under the Act? What about the use of energy
efficient equipment, is that a "practice"?

The questionable nature of our authority in this area is best
illustrated by our own experiences. Despite the statute's sixty-five
years on the books, the Statement cites only two cases in which the
Commission has equated "practices" with advertising[^27] 3 This lack of
precedent alone demonstrates what a significant step these guidelines
represent in expanding the reach of the Commission's authority[^28] 4 It
is one thing to nibble on the edges of advertising regulation (as these
cases arguably did); it is quite another to enter into that arena full
stride after sixty-five years of dormancy[^29] 5

**Courts Have Been Reluctant to View Section 201's "Practices" Language
to Include Advertising**

Courts have also called into doubt the majority's interpretation of
Section 201. Although the jurisdictional issue has never been squarely
presented, courts have examined the scope of the FCC's advertising
authority in the context of various state preemption cases. While the
legal analyses in these cases are distinguishable, the decisions
illustrate the facial weaknesses in our jurisdictional assertions. For
example, a federal district court in New Jersey concluded that "Sections
201, 202, and 203 of the Communications Act impose no duty on common
carriers to make accurate and authentic representations in their
promotional practices. . . [^30] 6 In holding that state law advertising
claims could go forward against a carrier, the Second Circuit similarly
held that "while the \[Communications Act\] does provide some causes of
action for customers, it provides none for deceptive advertisement and
billing.[^31] 7 That court concluded that the Act "does not indicate a
uniquely federal interest . . . in preventing a carrier from
misrepresenting the nature of its rates to its customers.[^32] 8 The
Seventh Circuit's message to the FTC in *Miller* is equally applicable
to the FCC here: "The regulatory approach articulated by the Commission,
while it may be a desirable one, is not the one Congress appears to have
adopted.[^33] 9

Although I am heartened by the Statement's assertion that it "does not
preempt existing state law," I am also concerned that today's decision
may cast doubt on state authority in this area. As one district court
held, "\[t\]he savings clause of the Communications Act must be read to
preserve only state claims that address obligations different from those
created by the Communications Act.[^34] 10 Our action today suggests
that the Communications Act creates an obligation regarding truthful
advertising -- potentially creating uncertainty regarding state law
claims in this area.

I also want to point out that it appears that the states have done an
adequate job in this area. Thus, it is not clear from a policy or
consumer perspective that our intervention is necessary.

> **The Pay-Per-Call Experience**
>
> Recent Congressional action further illustrates the misguided nature
> of today's action. In 1992, Congress passed the "Telephone Disclosure
> and Dispute Resolution Act\" to address the problems created by 900
> pay-per-call services. Those issues were not unlike the customer
> concerns that today's Statement is designed to address. Yet when
> Congress sought to solve problems created by 900 service advertising,
> it specifically assigned that duty to the FTC, while assigning carrier
> regulation to the FCC[^35] 11 Why? Because Congress understood that
> the FTC may lack authority over 900 services' advertising under the
> "common carrier" exemption yet the FTC had the requisite expertise to
> address advertising abuses. In doing so, Congress gave the FCC
> distinct regulatory responsibilities over pay-per-call services, but
> not for these services' advertising. If the FCC had authority over
> "advertising," it does not appear as if Congress knew about it. In my
> view, similar explicit Congressional action would be required before
> we should enter the advertising regulation arena.
>
> **A Zero Sum Game**
>
> The drafting of this Statement has already consumed substantial
> resources. Interpreting and implementing it and its potential progeny
> will demand significant additional energy. Moreover, the agency's lack
> of expertise and the wide array of entities who advertise or market
> these services further exacerbate these resource demands.
>
> Inherent in the resources this initiative may consume is the
> majority's implicit decision to move resources away from other
> activities in order to regulate advertising. Our budget is a zero sum
> game. Resources for advertising regulation are resources taken away
> from other Commission activities. In a period of hiring freezes and
> travel moratoria, I cannot support the diversion of resources to
> advertising supervision. We have explicit, and in many cases
> exclusive, authority over a number of consumer protection initiatives,
> including interstate obscene and harassing phone calls (§ 223),
> unsolicited interstate fax advertisements (§ 227), slamming (§ 258)
> and radio interference (§ 302). Unlike the advertising issues
> addressed in the Statement, states are generally not in a position to
> address these consumer concerns. In my view, and apart from my legal
> concerns, our resources would be better deployed in areas where the
> FCC has clear (and often sole) jurisdiction to protect consumers. Too
> often we do not have the resources to promptly and comprehensively
> address consumer concerns in these core jurisdictional areas. I
> believe our job is to fully and completely do the "good" Congress
> charged us with under the statute long before we turn our attention to
> issues outside of our clear authority.
>
> Regardless of the precision or persuasiveness of my legal and policy
> views, there will be those who ask: "How could you be against the
> FCC's protection of consumers from fraudulent advertising?" My answer
> is also a question: "How could you be against the FCC fully staffing
> and funding our primary and explicit statutory responsibilities?"
>
> Based on the foregoing, I respectfully dissent.

[^1]: 47 U.S.C. § 201(b).

[^2]: *Business Discount Plan, Inc.* 14 FCC Rcd 340, 355-358 (1998);
    *AT&T Corp.*, 71 RR2d 775 (1992).

[^3]: 15 U.S.C. § 45. Section 5 declares unlawful "unfair or deceptive
    acts or practices in or affecting commerce."

[^4]: These principles are articulated in the FTC's Deception Policy
    Statement and Advertising Substantiation Policy Statement. *See
    generally* Federal Trade Commission Policy Statement on Deception,
    appended to *Cliffdale Associates, Inc.*, 103 F.T.C. 110, 174 *et
    seq.* (1984) ("Deception Statement"); Advertising Substantiation
    Policy Statement, appended to *Thompson Medical Co*., 104 F.T.C.
    648, 839 (1984), *aff\'d,* 791 F.2d 189 (D.C. Cir. 1986), *cert.
    denied,* 479 U.S.1086 (1987). The FTC also has authority to
    challenge unfair trade practices. An unfair practice is one that
    causes or is likely to cause substantial injury to consumers which
    is not reasonably avoidable by consumers themselves and not
    outweighed by countervailing benefits to consumers or competition.
    15 U.S.C. § 45(n). The majority of FTC advertising cases are brought
    pursuant to the FTC's deception authority.

[^5]: The FCC has taken a similar approach under section 201(b) of the
    Communications Act: "BDP knew, or should have known, that customers
    acting reasonably under the circumstances would be misled and
    confused by misrepresentations regarding the material issue of BDP's
    identity, and that customers would rely on such misrepresentations
    to their detriment." *Business Discount Plan*, 14 FCC Rcd at 356.

[^6]: Deception Statement, 103 F.T.C. at 182.

[^7]: *Id.* at 179, *quoting FTC v. Sterling Drug, Inc.*, 317 F.2d
    669,674 (2d Cir. 1963).

[^8]: The law does not require that every item of information that might
    be useful or interesting to consumers be disclosed in advertising.
    Only information necessary to prevent consumer deception on a matter
    of importance to them must be disclosed. *See International
    Harvester Co.*, 104 F.T.C. 949, 1059-60 (1984).

[^9]: The FTC's Telemarketing Sales Rule, ("TSR"), 16 C.F.R. Part 310,
    provides specific provisions on what constitute material
    misrepresentations in the context of telemarketing, and what
    material information must be disclosed in order to avoid deceiving
    consumers through telemarketing. The TSR covers all "telemarketing"
    \-- defined as any plan, program, or campaign to sell goods or
    services through interstate telephone calls. It applies to all
    telemarketers, regardless of on whose behalf they are calling or
    what product or service they are selling, even telemarketing
    companies that call on behalf of organizations whose activities are
    exempt from FTC jurisdiction. Coverage of the Rule extends both to
    calls placed to and received from consumers, so long as the calls
    are part of a plan, program, or campaign to sell goods or services
    through interstate telephone calls.

[^10]: For example, if a consumer paying 10¢ a minute and a \$5.95
    monthly fee places 100 minutes of calls per month, his or her total
    would be \$15.95 a month or almost 16¢ per minute. This figure would
    contrast sharply with the "10¢ a minute" rates prominently touted in
    typical ads for long-distance calling plans.

[^11]: See Section III for a discussion of the factors to consider in
    assessing whether a disclosure is "clear and conspicuous."

[^12]: *See generally General Motors Corp.*, 123 F.T.C. 241 (1997);
    *American Honda Motor Co.*, 123 F.T.C. 262 (1997); *American Isuzu
    Motor Co*., 123 F.T.C. 275 (1997); *Mitsubishi Motor Sales of
    America, Inc.*, 123 F.T.C. 288 (1997); *Mazda Motor of America,
    Inc*., 123 F.T.C. 312 (1997) (consent orders) (complaint alleging
    that ads touting "zero down" are deceptive even though fine print
    disclosures and/or point of sale or other sources make clear that
    significant costs apply at lease inception; order defining clear and
    conspicuous disclosure of terms in ads for car leases as "readable
    \[or audible\] and understandable to a reasonable consumer").

[^13]: *See, e.g.*, Regulations Under the Comprehensive Smokeless
    Tobacco Health Education Act of 1986, 16 C.F.R. § 307.

[^14]: The FTC has also used phrases such as "clear and prominent" and
    "of sufficient clarity and conspicuousness" to articulate the same
    concept. 63 Fed. Reg. 25002, FTC's Notice Seeking Comment on the
    Interpretation of FTC Rules and Guides for Electronic Media (May 6,
    1998).

[^15]: Deception Statement, 103 F.T.C. at 175-76. *See also American
    Home Products*, 98 F.T.C. 136, 374 (1981), *aff\'d,* 695 F.2d 681
    (3d Cir. 1982).

[^16]: *See generally General Motors Corp.*, 123 F.T.C. 241 (1997);
    *American Honda Motor Co.*, 123 F.T.C. 262 (1997); *American Isuzu
    Motor Co.*, 123 F.T.C. 275 (1997); *Mitsubishi Motor Sales of
    America, Inc*., 123 F.T.C. 288 (1997); *Mazda Motor of America,
    Inc*., 123 F.T.C. 312 (1997) (consent orders) (complaint alleging
    that ads touting "zero down" are deceptive even though fine print
    disclosures and/or point of sale or other sources make clear that
    significant costs apply at lease inception; order defining clear and
    conspicuous disclosure of terms in ads for car leases as "readable
    \[or audible\] and understandable to a reasonable consumer"). See
    also *United States v. Mazda Motor of America, Inc.*, (C.D. Cal.
    Sept. 30, 1999) (consent decree) (\$5.25 million total civil penalty
    for violations of FTC and state orders related to disclosures in car
    leasing advertising).

[^17]: 16 C.F.R. § 308.

[^18]: *Kraft, Inc.* 114 F.T.C. 40, 124 (1991), [aff'd]{.underline}, 970
    F.2d 311 (7th Cir. 1992), *cert. denied,* 479 U.S. 1086 (1987). *See
    Thompson Medical Co.,* 104 F.T.C. 648, 797-98 & n. 22 (1984),
    *aff\'d,* 791 F.2d 189 (D.C. Cir. 1986), *[cert.
    denied]{.underline},* 479 U.S. 1086 (1987); Deception Statement, 103
    F.T.C. at 180.

[^19]: Deception Statement, 103 F.T.C. at 180-81.

[^20]: *See, e.g., Dell Computer Corp.,* C-3888 (Aug. 6, 1999) (consent
    order); *Micron Electronics, Inc.*, C-3887 (Aug. 6, 1999) (consent
    order); *Häagen-Dazs Co.,* 119 F.T.C. 762 (1995) (consent order);
    *Stouffer Foods Corp.,* 118 F.T.C. 746, 802 n.10 (1994).

[^21]: *See, e.g., Frank Bommartino Oldsmobile, Inc.,* C-3774 (Jan. 5,
    1998) (consent order); *Archer Daniels Midland Co.,* 117 F.T.C. 403
    (1994) (consent order).

[^22]: Deception Statement, 103 F.T.C. at 180-81.

[^23]: *See generally General Motors Corp.*, 123 F.T.C. 241 (1997);
    *American Honda Motor Co.*, 123 F.T.C. 262 (1997); *American Isuzu
    Motor Co*., 123 F.T.C. 275 (1997); *Mitsubishi Motor Sales of
    America, Inc.*, 123 F.T.C. 288 (1997); *Mazda Motor of America,
    Inc*., 123 F.T.C. 312 (1997) (consent orders) (complaint alleging
    that ads touting "zero down" are deceptive even though fine print
    disclosures and/or point of sale or other sources make clear that
    significant costs apply at lease inception; order defining clear and
    conspicuous disclosure of terms in television and other ads for car
    leases as "readable \[or audible\] and understandable to a
    reasonable consumer"). *See also United States v. Mazda Motor of
    America, Inc*., (C.D. Cal. Sept. 30, 1999) (consent decree) (\$5.25
    million total civil penalty for violations of FTC and state orders
    related to disclosures in car leasing advertising); *Kraft, Inc.*,
    114 F.T.C. 40, 124 (1991), *aff\'d*, 970 F.2d 311 (7th Cir. 1992),
    *cert. denied*, 507 U.S. 909 (1993); *Thompson Medical Co.*, 104
    F.T.C. 648, 797‑98 (1984), *aff\'d,* 791 F.2d 189 (D.C. Cir. 1986),
    *cert. denied*, 479 U.S. 1086 (1987).

[^24]: Maria Grubbs Hoy & Michael J. Stankey, *Structural
    Characteristics of Televised Advertising Disclosures: A Comparison
    with the FTC Clear and Conspicuous Standard,* J. Advertising, June
    1993, at 47, 50; Todd Barlow & Michael S. Wogalter, *Alcoholic
    Beverage Warnings in Magazine and Television Advertisements,* 20 J.
    Consumer Res. 147, 151, 153 (1993); Noel M. Murray, *et al*.,
    *Public Policy Relating to Consumer Comprehension of Television
    Commercials: A Review and Some Empirical Results*, 16 J. Consumer
    Pol\'y 145, 164 (1993).

[^25]: .1 15 U.S.C. §§ 45(a)(2), 46(a), 46 (b). This enabling statute
    otherwise empowering the FTC clearly has exceptions regarding
    regulation of common carriers. The case of *FTC v. Miller*, 549 F.2d
    452 (7 th Cir. 1977), squarely applied this exception to misleading
    advertising by common carriers.

[^26]: "2 See 15 U.S.C. § 5711.

[^27]: .3 Both cases were within the last ten years, and neither was
    appealed on this issue. As shown below, both cases may be best
    described in terms other than as advertising complaints.

[^28]: .4 The first case cited by the item is the *Business Discount
    Plan* decision from last year. 14 FCC Rcd 340 (1998). That decision
    represents the only clear assertion of Commission authority over
    advertising under Section 201. However, even in that case, the
    advertising claim arose out of telemarketing based slamming
    complaints -- an area in which we have clear jurisdiction under 47
    U.S.C. § 258. I believe *Business Discount Plans* can best be
    interpreted as an indication that deceptive advertising that results
    in illegal activity may aggravate such conduct. However, it is a
    different exercise to suggest that we will now monitor all
    advertising -- an area in which we have little, if any expertise \--
    and punish any misleading conduct as conduct alone. The second case
    cited in the Statement, *AT&T* 71 RR2d 775 (1992) is even weaker.
    *AT&T* did not find any violation of Section 201(b) and the "letter
    of admonishment" was issued under Section 4(i).

[^29]: .5 I also continue to object to the agency's persistent use of
    "Policy Statements" rather than rules to implement new regulatory
    policies. By removing these issues from the rigors of the
    Administrative Procedure Act, we eliminate the opportunity for
    interested parties to participate in the policy development process
    and shield these decisions from judicial review.

[^30]: "6 *Weinberg v. Sprint Corp*, 165 F.R.D. 431 (D. N. J. 1996),
    *appeal dismissed*, Civ. No. 96-354 (AMW)(May 23, 1996). Similarly,
    other courts have held that the Communications Act does not provide
    a remedy for failure of advertising to fully disclose certain
    components of services, or even fraudulent advertising. *See
    DeCastro v. AWACS*, 935 F. Supp. 541 (D.N.J. 1996); *In re Long
    Distance Telecommunications Litig.*, 831 F.2d 627 (6th Cir. 1987).

[^31]: "7 *Marcus v. AT&T*, 138 F.3d 46, 54 (2d Cir. 1998).

[^32]: "8 *Id.*

[^33]: "9 *FTC v. Miller*, 549 F.2d 452 (7th Cir. 1977) (holding the FTC
    had no authority to regulate common carriers who were then regulated
    by the Interstate Commerce Act.) So, under *Miller* the FTC has no
    authority in the area of common carriers and under the
    Communications Act the FCC does not have clear authority either.
    Joint statements from the impotent agencies cannot resolve this
    conundrum.

[^34]: "10 *See Marcus v. AT&T Corp.*, 938 F. Supp. 1158, 1168 (S.D.N.Y.
    1996), aff'd, 138 F.3d 46 (2d Cir. 1998); *see also Comtronics Inc.
    v. Puerto Rico Telephone Company,* 553 F.2d 701, 707 n.6 (1st Cir.
    1977). The Commission has recently affirmed the availability of
    state claims in this area. *See Southwestern Bell Mobile Systems*,
    FCC 99-356 (Nov. 24, 1999).

[^35]: .11 See 15 U.S.C. § 5711-5724. Congress also passed Section 228
    of the Communications Act to give the FCC additional tools to combat
    900 services' abuses.