In the Matter of: )

)

TELEPHONE CUSTOMER SERVICE FORUM )

)

Pages: 1 through 112

Place: Washington, D.C.

Date: June 9, 2000

Before the

FEDERAL COMMUNICATIONS COMMISSION

Washington, D.C. 20554

In the Matter of: )

)

TELEPHONE CUSTOMER SERVICE FORUM )

)

Commission Meeting Room

Federal Communications

Commission

445 12th Street, S.W.

Washington, D.C. 20554

Friday,

June 9, 2000

The parties met, pursuant to the notice of the

Commission, at 9:13 a.m.

APPEARANCES:

LORRAINE MILLER, Chief, Consumer Information

Bureau (CIB), FCC

WILLIAM KENNARD, Chairman, FCC

ROGER GOLDBLATT, Director, Consumer Education

Office, CIB

TOM SHIRLEY, CIB

KAY WALTERS, CIB

WENDY CHAMBERS, CIB

STEVE ALLBAKER, CIB

BRENDA ALTHOFF, CIB

APPEARANCES (Continued):

NANCY BROCKWAY, Commissioner, New Hampshire

Public Utilities Commission

JIM HURT, Director, Consumers Utility Counsel,

Governor\'s Office of Consumer Affairs, State of

Georgia

SHIRLEY ROOKER, President, Call for Action

STEPHEN JONES, Director, Bureau Network

Division, Better Business Bureau

JEFF KRAMER, Legislative Representative, AARP

LIZ CRENSHAW, Consumer Reporter, WRC-TV

KAREN PELTZ-STRAUSS, Deputy Bureau Chief, CIB

CHARLIE CRAWFORD, Executive Director, American

Council of the Blind

MATTIE ROBINSON, Senior Consumer

CLAUDE STOUT, Executive Director,

Telecommunications for the Deaf, Inc.

GLORIA VERDUZCO, Hispanic Consumer

LORRAINE MILLER

JOHN GOODMAN, President, e-Satisfy

[P R O C E E D I N G S]{.underline}

(9:13 a.m.)

MS. MILLER: Good morning. Okay, Rich, you can sit down now. Good morning
and welcome. Isn\'t it a beautiful morning outside? We\'re just
delighted to see each and every one of you this morning.

Today our Customer Service Forum is a first for the Federal
Communications Commission. In a world where advanced telecommunications
services, with broad band, high speed digital services, convergence and
wireless technologies and networks are changing the way Americans
actually do their business, we are, in a very real sense, having virtual
reality and spawning new technologies and services and creating a
smaller, a more linked worldwide community.

Given that, the Consumer Information Bureau of the Federal
Communications Commission is committed and hopes with this forum this
morning that we want to take the \-- ask the people who provide the
services to our communities to take a moment and stop. Let\'s evaluate
the kind of service delivery we\'re giving and the effect that it has on
the consuming public.

All of us realize that the American public now has come to accept and
expect good consumer service. So today we hope to take a critical look
together at what we\'re doing. Let\'s highlight the positive and let\'s
work together to come up with some solutions for the problems we
uncover.

It is always a pleasure for the Consumer Information Bureau to have the
support and, more importantly, the presence of our chairman. Ladies and
gentlemen, William E. Kennard, the Chairman of the Federal
Communications Commission. Chairman Kennard.

(Applause.)

MR. KENNARD: Thank you very much, Lorraine, and welcome, everyone, to
the FCC. I see a lot of familiar faces. A lot of you have spent a lot of
time here before, and it\'s good to see you.

I woke up this morning and I thought that it was a very propitious day
to have this forum, because I opened [The Washington Post]{.underline}
and on the front page is our own Roger Goldblatt, Director of Consumer
Education at the FCC. (Applause.) Where is he? There he is. I tell you,
I was so pleased to see that, and I said, God, that guy is good. He got
a plant on the front page of [The Washington Post]{.underline} for this
event. The guy is good.

(Laughter.)

MR. KENNARD: That\'s right. I don\'t think you need a press person.
Well, I think a lot of Roger\'s comments in here really sum it up and
that is, there are a lot of angry consumers out there about customer
service and misleading advertisements and whatnot. And we wanted to
convene this forum because I know many of you are from industry and from
consumer advocacy groups and we\'re really serving the same customer
base. And we\'re all in this together. I mean, that\'s what it\'s really
all about.

One of the things we\'re going to talk about here today is how
oftentimes we\'re dealing with the very same consumers. That is,
they\'ll call a telephone carrier and the telephone carrier will just
forward the call to the FCC. And Lorraine and I were talking about this
yesterday and how this is becoming quite a problem for us, because
oftentimes, by the time that customer is referred to our assistance
center here at the FCC, we\'ve got one angry consumer. And Lorraine and
I were talking about how to deal with that, and I said, well, let\'s
just have a button where we can send them right back.

(Laughter.)

MR. KENNARD: But we can\'t do that. But what we can do is we can work
with all of you to improve the way all of us deal with consumers in this
really rapidly changing environment. What is happening in the world that
we live in of telecommunications is that it\'s changing so incredibly
fast and we\'re transitioning from an era of monopoly regulation to an
era of competition.

That\'s a huge challenge for those of us who care about consumer
education, because that means that most consumers who were used to being
protected by government in this area, where they had really one provider
and that provider was highly regulated, now they\'re having to deal in a
competitive environment, where they have to buy products and services
from multiple providers. They have to sort through all these confusing
calling plans. They are falling prey to aggressive marketing tactics,
oftentimes deceptive marketing tactics. And they\'re very vulnerable,
because they\'re not used to buying telephone services in an area where
they don\'t have lots of protection from federal and state regulators.

Well, we know we can\'t go back. We can\'t go back to the old monopoly
environment, because ultimately, competition is good for consumers. We
want them to have these choices. We want them to have lower rates and
more innovation and all the good things that competition brings. But we
have to arm them with the tools to protect themselves, and basically,
that\'s information. And that\'s what our Consumer Information Bureau is
all about. It\'s arming consumers with the information they need to make
informed choices in this competitive market place.

I\'m very, very proud that we\'ve set up the Consumer Information Bureau
under Lorraine\'s leadership. It\'s gotten off to a terrific start. A
couple of weeks ago, I participated in a management retreat. All of
Lorraine\'s senior managers got together. They left the FCC for a day to
talk about their plans for this Bureau. And I tell you, there was a
tremendous amount of excitement in that room around the creation of this
Bureau and the new tasks that people have.

But we can\'t be successful alone. We need the help of industry and our
colleagues at the state level and consumer advocacy groups on the
outside to help us pull this off, and that\'s what this forum today is
all about. I\'m sure it\'s going to be a successful forum and I\'m
looking forward to the feedback that we get from the forum. And if you
can\'t resolve this issue of, you know, consumer complaints coming to us
from the carriers, Lorraine and I will sit down and think about that
button again that we might have to implement for the FCC.

Well, thank you all for being here and good luck today.

(Applause.)

(Whereupon a videotape was shown.)

MR. GOLDBLATT: A little dramatization of some calls that we get. You
might recognize some of the voices. These are recreations of real calls
that we got. We didn\'t want to put real callers on the spot.

One of the things we did during our last forum \-- and it worked really
well \-- was explain how we come up with these ideas for forums, really,
based on calls that we get at our consumer centers, both in Gettysburg
and here in the Portals Building. For this one particularly, we did a
study, which is in your booklets, of a sampling of 1,000-some-odd
complaints that came in during the month of May. And we have what we
call \-- they\'re CAMS, Consumer Advocacy Mediation Specialists, sitting
here, and they\'ll explain how we did the survey, how we came up with
the results, and give you another feel for some of the calls that have
come in. So I will start with Tom, Tom Shirley.

MR. SHIRLEY: Okay, thank you. Am I on over here? Oh, there I am. Okay,
plenty of feedback.

Okay, well, listen, thank you all very much for coming. We really,
really appreciate the chance to speak with you. And we do want to speak
*with* you.

How many folks from the carriers are here this morning? Can we see hands
of carriers? Okay, the reason I ask is because we\'re from Gettysburg,
Pennsylvania, and we don\'t know even a lot of the agency folks here.
But thank you, carriers, very much, and everyone else, for coming.

It\'s a great opportunity for us, this forum, for all of us to exchange
some ideas and maybe make ourselves better able to provide the best
customer service possible. I think if we\'re in the customer service
business, we know that good customer service pays dividends in reduced
complaints and follow-on benefits of reduced overhead, reduced costs.

And by the way, your customers and our customers are the same. Very
often, they\'re the very, very same individuals who\'ve called you and
then call us. We share those customers. So what we want to do is to
promote speaking in one voice to those customers. We want to have you
have the same information that we have, so that we can be level and even
when speaking to our shared customers \-- make that information the
same. And I\'ll be very frank with you. We want to sell you our
information. We have it on a special low price of no dollars and zero
cents. Please let us share this information with you.

We want to relate to you \-- we have a little bit already \-- some
things that your customer and our customers that we share, that we\'re
hearing. And then we\'d like to give you our version of that. We\'ll do
that when some of my other teammates here, Kay and Wendy and Brenda and
Steve, speak to you. I\'m going to be very quick here.

And really, believe me, our purpose is not to beat you up. We don\'t
want to beat you carriers up. We want to give you some feedback. It\'s a
little rough sometimes, it\'s a little outrageous, but please remember,
we\'re just the messenger. So don\'t shoot us quite today.

Okay, I want to show you the tools that we use to talk to our customers.
Now, you saw on the video, those are our people talking to our customers
and yours, and I want to show you very quickly the tool we use to get
information from them and to provide information to them. It includes
their phone numbers, names, addresses, and e-mail addresses and fax
numbers and that kind of thing.

I\'m on the video with my \-- okay, here we go. Okay, well, there we
are, the Federal Communications Commission Consumer Information Bureau.
There\'s our toll free number right there, (888) 225-5322. That spells
(888) CALL FCC on your keypad, on your phone keypad. We have a TTY
that\'s (888) 835-5322 or (888) TELL FCC. Hang on here and I\'ll give
you a little simulation of what we see when the customers call us. Okay.
There that is again.

The application software we use is called Expert Adviser. It provides
the means for our CAMS \-- that\'s Consumer Advocacy and Mediation
Specialist \-- that\'s all of us \-- to record the details of each call.
And I don\'t mean tape-record. I mean to record in our computers, in our
databases. As you will see, it\'s a collection of windows and dialogue
boxes. We\'re going to look at it right now.

When a call comes into our consumer center, if the caller does not have
his or her caller ID blocked, we will automatically get the phone number
right there, in the box right here, where you see the phone number. We
do have to ask them for their name. Here the state is actually keyed to
the area code, so that\'s provided to us right away.

And let us say that a caller calls. We begin over here at level 1, sort
of coarse-tuning. And the first few words out of their mouth, we can
tell whether they want to talk about \-- whether they want to get FCC
info or forms that we have for them, or whether they want to talk about
their telephone, as they very often do. In that case, we\'ll click on
telephone over there and then we get a second level that provides
various different topics under Telephone.

In this case, we\'ve set up slamming. And what we\'re able to provide to
them are some actions they can take when they get slammed. We give them
some guidance on how to file a complaint. We talk a little bit about
sanctions that have been levied on slammers.

Now, here is the information that we can provide to them. We can mail it
to them, fax it or e-mail it. So this part right here, the name is
populated from the earlier entries and the numbers. So in this case,
we\'re going to fax this to this person in this example. Or if the
person has an e-mail address, we can fill in their e-mail address right
here and send it to them.

We also have an on-line complaint form that we can help them fill out as
they speak to us or they can go onto our Web page and fill out the
complaint form themselves. There\'s the other part of the complaint
form. It\'s populated with their phone number, address, name \-- that
kind of thing.

And then, in this case, you remember it was it was a slamming case so
we\'ve highlighted slamming right here. We have other things here too
that we can highlight. So onto the next step, and finally we\'ll come
down here and submit the complaint. And we get quite a lot of automated
processing of a complaint that way.

Now, those are the mechanics of how we take a call. We want to tell you
a little bit more about some of the content of the calls. So Kay, can
you give us your little bit of the program, please? Thank you.

MS. WALTERS: Good morning, my name is Kay Walters and I have worked for
the Gettysburg Consumer Center for four years. I\'d like to talk to you
today about some of the calls that I have taken from telephone
consumers, specifically calls from senior citizens.

My first telephone consumer was a senior lady who called and was very,
very upset and she was on the verge of tears. She was very concerned
about this new charge, the \$1.04 from the local exchange carrier. It\'s
called the PIXIE charge \-- Presubscribed Interexchange Carrier charge.
And that\'s in our Rule 69.153. Basically it is, it says, if an end user
customer does not have a presubscribed interexchange carrier, that is, a
long-distance carrier, the local exchange carrier may collect the PIXIE
directly from the end user. And the FCC sets a cap of \$1.04 on this
charge.

Now, she was on a fixed income of \$450 and she said she just could not
afford this extra charge. She said she never accepted monetary help from
the federal government or the government at all and didn\'t want to
start, and at that point, she was just in tears.

The caller also stated that the local exchange carrier said the FCC
mandates this charge and she had to call the FCC to take it off. What I
advised the caller was that the charge was not mandated. I also advised
her that nothing on her local phone bill is mandated by the FCC and that
nothing on her bill goes to the federal government other than the
federal excise tax, which is around 3 percent of her bill. Otherwise,
the phone company keeps the rest of the money for the upkeep, except
maybe local taxes or state taxes.

And I told her I was very sorry, but the FCC could not take that charge
off her bill because we didn\'t put it on. I sent her some information
through the expert adviser that Tom told you about, on a Lifeline
Program. That\'s a program for people on fixed incomes. They go through
the local phone company to apply for that. And I also sent her
information about the \$1.04, the access charge information.

My suggestions for better customer service would be for the local
exchange carrier to know their bills. They should know exactly what each
charge is for and be prepared to explain the charges. If the local
exchange carrier gives the correct information out the first time, they
don\'t get that second call back after they\'ve talked to the FCC and
have learned the actual facts. And always, when someone calls that\'s on
a fixed income, it\'s a very good suggestion if they suggest the
Lifeline Program, because usually the telephone customers, when they
call us, are very surprised there is such a program out there. Most
important: empathy for distressed people. I think we need to appreciate
the situation they are in and try to find them a helping hand any way we
can.

My second telephone consumer was an older lady calling, sobbing so hard
I couldn\'t even understand anything she was saying. Finally I had to
tell her to take a couple of deep breaths and try to calm down so I
could understand. Then she started telling me her story.

She had charges on her bill for calls she didn\'t make. They were
Dial-A-Porn calls, a really high bill, and they just didn\'t have the
money to pay for them, since they were on a fixed income, also. She said
the local exchange carrier said they just couldn\'t help her. They only
bill for other companies because the FCC mandates that they do this. And
they demanded payment or at least to set up a payment plan, or they
would disconnect her phone.

She said she was caring for her sick husband and needed the phones to
call doctors and maybe even 911 and she couldn\'t have her phone
disconnected. She said the local exchange carrier also suggested that
she call the long-distance company that billed her. She called the
long-distance company and they told her they wouldn\'t take the charges
off because they knew the calls were made from her home.

What I advised the caller was that she could ask the local exchange
carrier to do a branch tap search to see if their line was tampered
with. Also ask the local exchange carrier if they could recourse the
charges back to the long-distance carrier and ask the local exchange
carrier to block 900 numbers. I also advised that neither the
long-distance company nor the local exchange carrier could disconnect
her for nonpayment of pay-per-call charges, and this is according to the
Communications Act of 1993, Section 228(c)(3). And it states, \"A common
carrier shall not disconnect or interrupt a subscriber\'s local-exchange
telephone service or long-distance telephone service because of
nonpayment of charges for any pay-per-call service.\" I also suggested
the Lifeline Program to her and I sent her information on the Lifeline
Program and consumer tips information. The consumer tips information is
a way to lower your long-distance bill. I thought maybe it would be
beneficial.

I also advised her to call the Federal Trade Commission, gave her that
toll free number, because the FTC takes information on problem
informational calls. My suggestion for better customer service is, the
local exchange carrier should either tell why they bill for other
companies or at least don\'t say the FCC mandates they bill for other
companies. The local exchange carrier could have suggested the branch
tap search of her phone line, the blocking of 900 numbers, and taken an
application for the Lifeline Program. Additionally, empathy for people
in distress. Even though it might have been the 50th, 60th call, you\'ve
got to treat it as if it were the first call of the day.

I\'ve brought information today if anybody cares for it, on the Lifeline
\-- not on the program, the Lifeline information and consumer
information regarding tips for lowering your long-distance bill. If
anybody needs that, I have it here. At this time, I\'d like to turn to
my colleague, Wendy, for more examples of calls.

MS. CHAMBERS: Good morning. Can everyone hear me all right? Okay, my
name is Wendy Chambers and I work in the Gettysburg Consumer Center.
I\'ve answered gazillions of calls regarding anything and everything. I
have talked to a lot of your telephone customers. I\'ve brought some
examples of the kinds of calls that I have taken day after day for the
last three years.

Inaccurate information. We received a call from a consumer who had been
referred to us by her long-distance telephone company. This caller
wanted an explanation of the federal, state and local surcharges on her
bill. She was told that only the FCC could explain this charge. She was
also told that the carrier generates her bill, sends it to the FCC, we
put on the taxes and surcharges. It then is returned to the carrier and
then sent out to their customers. And that explains a lot of the delays
in the billing. (Laughter.)

We received a call from a consumer who had been referred to us by her
local telephone company. She wanted an explanation of the charges on her
bill. She was told all the charges on her bill are mandated by the FCC.
They indicated that the FCC slapped these charges on her bill and the
FCC receives the money, and to call us to find out why we are charging
her.

I told her the FCC did not put these charges on her bill. She was very
angry and did not believe a word I said, because she said her bill
indicated \"FCC charge.\" A few of us have half jokingly considered
telling the callers to write two checks \-- one to the FCC for these
supposedly mandated charges (laughter), and one to the local phone
company.

Another charge that is very misunderstood is the local number
portability charge. We have received tens of thousands of calls from
consumers who have been referred by local telephone companies with
either incorrect information or no information at all. One lady told me
her local carrier told her this charge is authorized by the FCC and it
allows her to keep her phone number even if she moves from California to
New York. I told her, under Rule section 52.33, that the local exchange
carriers may recover their carrier-specific costs directly relating to
providing long-term number portability. So carriers are allowed to
recover the cost of providing portability. They may; they are not
required to do this.

High expectations. A call was referred to us by the local telephone
company this time. She wanted an explanation of the network access
charge. We weren\'t sure what she meant by that, but she indicated it
was \$3.50, which to us indicated, that was the federal subscriber line
charge. She was told this charge was imposed by the FCC and to call us
to have it waived. We told her, according to Rule section 69.152(a), a
charge shall be assessed upon end users that subscribe to local exchange
telephone service. However, under subparagraph *m*, it allows for
charging less than the maximum, including 100 percent less or zero.

Another caller we had was referred to us by her long-distance carrier.
She had one of those charges on her bill to Madagascar. She told the
phone company she did not make this call. They said they could not help
her. However, if she called the FCC, we could pull up her bill on our
computer (laughter), we could tell her the phone number and the company
that the number belonged to. And they recommended that she call this
number to have this charge removed from her bill. We told her, of
course, we couldn\'t pull up her account on our computers and she
probably really didn\'t want to call Madagascar, because then another
international call would appear on her bill.

We had another call regarding the nonpresubscribed interexchange carrier
charge, otherwise known as the PIXIE. She was told the FCC makes the
local company charge this fee, because she did not have a long-distance
carrier. She was told to call us to find out why she was being punished
for not having a long-distance carrier and demand removal of this
charge.

I explained to her, according to the rule section that Kay indicated
earlier, that \-- you know, that rule section. After that, she
appreciated my explanation and told me she didn\'t like this charge but
now understood why it was on her bill. She wondered why the FCC allows
companies to lie to their customers.

Improper referrals. We receive many, many calls from consumers who are
very frustrated because they are sent from one company to another, from
one agency to another. We received a call from a snowbird who wanted to
put his telephone on vacation status during the months he was out of
state. He had been doing this for the last eight years. He was told this
time that there were new FCC regulations that require him to call the
FCC, that only we could put his phone on vacation service.

And for my last example, a lady called regarding the federal, state and
local taxes on her telephone bill. She had called her local phone
company earlier and was quickly sent to the FCC. I told her I could
explain the federal excise tax. However, I could not help her with her
state and local taxes because they varied, depending on where she lives.
I suggested, why don\'t we do a conference call with the local telephone
company. So I got them on the line, identified myself as Wendy from the
FCC, and I said I had one of their customers on the line who had called
earlier about her local and state charges and was referred to us. And
the customer service representative said, oh, now, that should have
never happened. We could explain those taxes to her.

This customer service representative was outstanding. She explained each
tax, the percentage, the address and a contact phone number where their
customers could call for further information. I thanked the customer
service representative and when we get off the phone, the customer said
to me, why didn\'t I receive this excellent customer service the first
time I called? Isn\'t it a shame to have to escalate to the FCC before
good customer service was achieved? It makes you wonder, doesn\'t it?
Thank you.

Now I\'d like to \-- Steve is next.

MR. ALLBAKER: Good morning, my name is Steve Allbaker (phonetic), and
I\'ve answered these kind of calls for the last four and a half years.

My first example is a gentleman who was totally confused about his phone
service. He has two phone lines in his home, both of which have the same
preferred long-distance carrier. At least that\'s what he thought until
he received his most recent bills. Calls on his second line were now
being billed by a carrier he neither chose or ever heard of.

He did contact the company and asked them what they thought they were
doing by billing him when he never authorized it? And their reply was,
the other phone company couldn\'t handle the calls, so they took over.
To this he replied, well, how come they\'re still handling those calls
on my first line, and he wanted to know what was going on. Their reply
to this question was that they were the same company and again stated
that they were handling his calls because the other company couldn\'t.

I asked him if he contacted his preferred carrier and he said he would,
but the phone number on the top of both bills were the same number and
he kept getting the same answer. He also stated that the second company
was billing him at the rate of one-minute call, 75 cents; four-minute
call, 75 cents, while his preferred carrier was charging him 10 cents a
minute, which he was happy about. He then asked me if this was a form of
slamming, at which point I couldn\'t reply because *I* was confused
about how this was being handled. (Laughter.) So I sent him information
and advised him to file a complaint with us and we\'d look into it and
find out exactly what was going on.

My second example was a retired couple who were totally disgusted with
the phone service. They were contacted by a long-distance carrier about
unlimited calls for a flat rate per month. Since they live in Texas and
have a son who is in his first year at West Point in New York, they
figured it was a good deal. So the caller took the information and did
the verification and everything and told them that the service would be
hooked up in approximately 10 days.

After three weeks and still not being hooked up to this service, they
contacted the company and requested that their order be canceled, since
if the company wasn\'t reliable enough to hook them up one time, they
couldn\'t be trusted to handle their calls. So the representative at
this time took their information and stated that he would have the order
canceled. They thought everything was fine until they received their
first bill from this company for the monthly service charge. At that
point again, they contacted the company and asked them what was going
on.

The representative did respond that, yes, they indeed were hooked up to
their service. At this point, they asked them, could you please have the
service canceled? And the representative stated that he would take this
complaint and put this in for a disconnection, but they would probably
be receiving another bill because it\'s in the next billing cycle. So
they then contacted their previous carrier and requested reconnection to
them and also contacted their local phone company about verification for
the reconnection, which was done on April 17.

On May 1, they did pay the unwanted company\'s bill, but then on May 10,
they received a nonpayment notice from this company, which stated that
unless the bill was paid by May 16, they would be turned over to a
collection agency. So after all this frustrating information and
everything, they keep calling back, they keep getting placed to another
location, all around the U.S. They never get to talk to the same
individual. And most recently what has happened is they\'re being
transferred to an automated system which puts them into different
locations and everything, and it helps them not at all because it always
asks them for a PIN number, which they don\'t have because this company
never actually was their company.

And so far they\'ve done this for eight times. And the end result of
this, they\'re now visiting their son in New York, because he\'s
concerned about what this is doing to their health, because the husband
has a heart condition and the wife does have seizures. And I told them
about the possibility that their payment and the nonpayment notice may
have crossed in the mail, so that may take care of itself, but keep
trying to resolve this with the company.

But the thing of it is, the problem could have been eliminated right
from the start if the first representative that took the cancellation
notice would have advised them to contact their local phone company,
that there may have been a request for a change in service. And they
could have put a PIC-freeze on at that time and that would have
eliminated the whole problem from there on.

And that\'s the end of my stories, and I\'ll give you to Brenda.

MS. ALTHOFF: Good morning. I\'m going to cover disclosing and
disseminating correct information. We received a call from a customer
asking for a definition of the access and universal charges on their
phone bill. The phone company gave a definition that the charges were
mandated by the FCC and given to the FCC to support their cost-of-living
raises in January. (Laughter.) So I thought if this was the case, that
now would be a good time to ask for the raise for next year. (Laughter.)

We received a call from a lady asking the phone company to explain a
charge on her bill. The representative stated, she could not help her.
She refused to give her name and would not transfer the lady to a
supervisor. The representative then put her on hold. She was on hold for
approximately 10 minutes and was finally connected to what she thought
was another department. This was actually a blind transfer, where she
was then transferred to a pornographic number by the representative.

We had another customer tell us that his wait time to get into the
service department of a major carrier to release his blocked line back
to his preferred carrier was three hours. He put the call on conference
until he finally got through.

My next caller was from a mother whose children were in college. She set
up a calling card so her children could keep in touch, and at that time,
the rate was 25 cents per minute and she had the card for several years.
She recently received a phone bill amounting to \$400. She immediately
got on the phone with the carrier and was told that she was put on a
different calling plan and rate. It was \$1.25 each time she connected
with the card and 97 cents per minute.

She asked the representative why she was not informed of the increase
and the representative told her that because her billing statement was
from the local exchange carrier, that they, the long distance company,
were unable to disclose rate information because of privacy. The only
privacy issues we are aware of are the customer proprietary network
information, which was enacted under the Telecommunications Act, section
702, and state that, \"Nothing in this section prohibits a
telecommunications carrier from using, disclosing or permitting access
to customer proprietary network information obtained from its customers,
either directly or indirectly, through its agents to initiate, render,
bill and collect for telecommunications services.\" So the rate
information may be disclosed.

The last subject that I would like to cover is broken promises. I
received a call and this was my call last week from a man who was close
to tears, and I don\'t know if you\'ve ever taken a call where you\'ve
had a person that\'s so distraught, pleading for help. He was a minority
small businessman with seven children. He opened a small automotive shop
last September, and at that time, he set up two lines with his local
exchange carrier. One number had long-distance, the other did not. The
second line was for his fax and computer.

His average long-distance amounted to \$10, so in May of this year, he
disconnected the long distance on his first line. In April of this year,
he received a long distance bill for the second line, which had his fax
and computer, which had no long distance, totalling \$2,700. Before this
date, no long-distance charges were ever received.

The next day, he placed a call to the long- distance company. The
representative told him that the second number was listed under a
different name and different social security number and the
representative would be sure to correct the name and social security
number on this account. The long-distance provider advised him to call
his local exchange carrier, so a call was placed to the local exchange
carrier the next day and the order was placed again to cancel all
long-distance.

A three-way conversation was placed by the local exchange carrier to
settle this dispute. The long-distance representative informed her
supervisor and stated that the problem would be corrected. She assured
him that the problem would be corrected and if \-- to call within 30
days if the problem did persist. She gave him her name and phone number.

At the end of April, he received a second bill, totaling \$10,000. The
summary of charges presents him as placing calls throughout the United
States, seven days a week, on a 24-hour basis. He immediately tried to
contact John or Jane Doe, the person who gave her name and number to
him, and was told that no one with that name worked at that number.

He talked with several supervisors and was then told the bill must be
paid. In May, he received a third bill, totaling \$23,000. This is a
true case. It\'s a real horror story. The point here is that there were
a lot of promises that were broken.

I\'d now like to turn this over to Tom Shirley to add some closing
remarks.

MR. SHIRLEY: Okay, I don\'t really have anything further, Roger, so go
ahead, please.

MR. GOLDBLATT: Thanks. Thank you all. We\'re now going to have a panel
\-- you would think that we get all the complaints about customer
service and telephone companies. Our next panel are other consumer
groups or organizations and they\'re going to tell their experiences, as
well. So why doesn\'t the next group come up, please? Have some coffee.

By the way, if the FCC was really getting all that money, we\'d probably
have bagels at that table. (Laughter.)

Okay, I\'m going to ask each person to introduce themselves and tell the
organization they\'re from before they go into their little stories. So
why don\'t we start with Nancy Brockway?

MS. BROCKWAY: Good morning, my name is Nancy Brockway. I\'m a
commissioner with the New Hampshire Public Utilities Commission and I
don\'t have the same kind of specific anecdotes to relate, although I
can tell you that from nine years working as a legal services attorney
and nine or ten years \-- eight years working as a staff member in
various public utility commissions and now for a couple of years as a
commissioner in New Hampshire, everything that we heard this morning are
the same types of complaints that state commissions get. And these are
the types of problems that consumers face when they\'re trying to
navigate their way through what is an increasingly complicated maze of
regulations, numbers of companies they have to deal with, and changing
situations.

I want to start by applauding the Federal Communications Commission for
their expanded response in recent years to consumer complaints. I
remember when I was a legal services attorney back along, we would try,
as attorneys, to call the FCC and get help for our clients with an
interstate bill and we couldn\'t get through as attorneys. And there
were very rigid requirements about filing complaints in writing. You
couldn\'t talk to anybody on the telephone. It seemed as if it was
extremely bureaucratic, and not intentionally, but effectively designed
to keep anybody from bothering the FCC with their consumer complaints.

And so the states had an unfunded mandate, if you will, to clean up
whatever messes there were. But we didn\'t have the jurisdiction. This
is changing and it\'s changing rapidly and for the better. These calling
centers that the FCC has created and the increased cooperation between
the federal government and state commissions to try to handle these
problems is a very welcome sign. And I think has already led to great
improvements in the quality of governmental response to consumers\'
problems.

I want to mention that the CIB, Consumer Information Bureau, of the FCC
has been participating actively in the new Consumer Affairs Committee of
the National Association of Regulatory Utility Commissioners and we are
grateful for this institutional cooperation. We exchange ideas. It has
led, for example, to a recent delegation of authority by the Federal
Communications Commission to the states to deal with slamming
complaints. And slamming complaints have been among the most difficult
for consumers to understand.

I remember, again, when I was representing individual consumers that it
was this business of being lied to or betrayed, more even than the money
that was at stake, that motivated people to try to make their way
through the bureaucracy to get justice. As we move to a more competitive
world, we get more and more of these types of problems, confusion, lack
of understanding of how the new system works, and then the bad apple
that spoils it for everybody.

Sometimes the bad apple is not just a little fly-by-night. Sometimes the
bad apples are very large and well-respected companies, and the irony is
that as we\'re moving to a system where competition is supposed to
police various aspects of the business and provide higher quality
service and lower rates, we\'re ending up with state commissions and the
FCC needing to do more enforcement and more consumer education and more
complaint mediation.

Jim Berg of the South Dakota Commission reported recently that they\'ve
had to triple the size of their customer assistance or consumer division
because of the number of inquiries that they\'re getting.

Another development I\'d like to report on is that states are now
cooperating amongst ourselves. We recently had a problem with a major,
very well respected utility and all the six New England states got
together and we brought representatives of this telecom company in and
sat them down, because we had compared notes and all of us were
experiencing the same problems of that company\'s left hand not knowing
what the right hand was doing and the customer falling between the
cracks. And the most difficult, terrible thing of all, of course, was
that they didn\'t give us any respect. It\'s one thing for them to
\"dis\" the customer, but when they were \"dissing\" us, that really got
us going.

And I\'m being facetious, but it indicates that there was no fear on the
part of that company that any kind of disrespect that they were showing
to the consumer or to us was going to come back to haunt them. Well, we
all got them together in one room together and at least for residential
customers, the turn-around time on their internal dealings with
complaints has dropped dramatically. So this kind of cooperation across
states, between the state and the federal government, is essential and
it\'s very useful.

I just want to end by saying that because the Federal Communications
Commission is increasingly seeing the network as a seamless loop from
the customer\'s premises through to whomever they call and back \-- and
in some ways that\'s justified, and in any event, in many cases, the
Federal Communications Commission has been upheld in its assertion of
this jurisdiction of seeing this as an interstate network \-- well, with
that assertion of jurisdiction over the rates comes the responsibility
that the former panel has expressed of responding to consumers\'
complaints. And we at the state level will continue to work very closely
with the FCC to help them in their response and to receive help from
them in dealing with customer complaints that come to us.

We see ourselves, despite the large number of complaints that go to the
FCC, we see ourselves as a first line of defense for consumers and hope
to continue this cooperative relationship that we have with the Federal
Communications Commission and thank them for this forum.

MR. GOLDBLATT: Thanks, Nancy. What we want to do is show that when we do
things in Washington, there are other states, other areas of the
country, that hear the same thing. We want to bring them in, because a
lot of our consumer problems are obviously shared by all over.

The next person, Jim Hurt, from Georgia.

MR. HURT: I\'m Jim Hurt. I\'m the public advocate in the state of
Georgia. I represent the residential and small business customers as
classes in any legal proceedings involving the telephone, where we think
that they have a direct interest.

I\'m going to bypass the unfair and deceptive, misleading practices this
morning. I think those were to be expected as we moved toward
competition and no one should have been surprised that such things as
slamming and cramming and so forth occurred.

Otherwise, I think that there are three forces right now that are
diminishing what we think of as traditional customer service. And those
forces are competition, competition and competition. First, competition
for larger customers, the large business customers, is creating a
tendency in the companies to provide better service for them at the
expense of residential and small business customers. I spoke earlier
this week with Commissioner Wise (phonetic) with the Georgia Commission
and he affirmed for me that he had also discerned a clear pattern on
this.

Second, the laws of corporate behavior in a competitive situation. The
loss by the RBOCs of large customers creates pressure to replace lost
revenues with vertical services. And I think as a result of that, we\'re
seeing increases in the cost of vertical services. We\'re also seeing
vertical services that are being rolled out too quickly before they\'re
really ready to be used. And then, when the glitches occur, that
engenders a lot of service complaints about those vertical services.

And third, the smaller companies are following suit in a competitive
environment, simply because they can, raising the costs of vertical
services, such as directory assistance and trying to meet public demand
for other vertical services, particularly the more trendy ones, which
also tend to be the ones that have more glitches in them at this point.

I have an anecdote. It is a personal anecdote. It occurred with me at my
home, my telephone service. We would notice that the telephone would be
on in the middle of the night. We have one of those lights that tells
you when the phone is being used, and I would pick it up to find out
what was going on and we would hear someone speaking in an African
dialect and these calls would go on for quite a long time. And the
African dialect later turned out to be that calls were going from
Atlanta to Gambia.

The bills, eventually amounting to more than \$1,200, accumulated on my
telephone bill for this. And we had to have six visits by the telephone
company to our home. And we went for four months, trying to get these
charges off of the bill and they kept coming back every month. Now, I
did not go through regular channels in trying to clear this up. I have
channels that I can use \--

(Laughter.)

MR. HURT: \-- and so that, of course, raises the queen question. If the
state representative, the officially sanctioned representative of
consumers in the state of Georgia, has this much difficulty with this
problem, what in the world is happening to \"Joe Six-Pack\" out there
when he has a problem?

I think the queen question at this point is, will competition eventually
correct these problems, or will regular customers just have to accept
the shortcomings in traditional customer service? And the answer for me,
and certainly this is an opinion, is that in our rush to create
competitive markets with a multitude of business players, we have
forgotten that telecommunications were regulated not only because they
were of monopoly status, but also because of their essential nature to
our way of life.

I would suggest that close monitoring of service complaints at this
point, closer monitoring, is appropriate and that we not be so
ideologically bound to competition that we rule out any possible tougher
reregulation of the service aspects of the telecommunications industry.
Thank you.

MR. GOLDBLATT: Thank you. Our next speaker \-- I\'m sure many of you
turn on the radio once in a while, you might have heard Shirley Rooker
from Call for Action.

MS. ROOKER: And if they haven\'t, you should.

(Laughter.)

MS. ROOKER: Our number is 1500 AM. You can even get us over the
Internet, actually. Thank you very much, Roger, and thank the FCC for
holding this very important discussion this morning.

Briefly, Call for Action is a nonprofit organization that starts
partnerships with radio and television stations. We have 24 offices
around the country. We\'re about to open three more. We have over 1,200
volunteers who deal with hundreds of thousands of consumer complaints
each year. We reach about 40 million consumers with a network of Call
for Action reporters that work with us. So we hear from a lot of
consumers.

Now, I will tell you that when I started going back and started looking
at some of the types of complaints, not only did we find that the
telephone industry gets a lot of complaints, but we\'re seeing a lot of
customer service complaints across the board. But I will focus primarily
on customer service.

I\'m not going to try to tell you about the complaints that we get,
because I think the CIB representatives very eloquently expressed to you
the concerns and problems that we have sometimes in getting correct
information in a timely fashion.

But I would like to focus instead on a study that I think is a very
compelling reason. It\'s a study that should be brought to the attention
of all companies, no matter what your business or what service you
offer. And always, when I listen to our customer complaints, it makes me
think, is customer service an oxymoron? And certainly some of our
consumers, our callers, would tell you it is.

But going back to the study, there was a study commissioned by the
Society of Consumer Affairs Professionals in Business. It\'s not a new
study \-- I mean, it\'s a new study, but it just reaffirmed studies that
have been done in the past. And what it revealed was that customers come
back to businesses, not because of pricing and merchandise, as you might
have guessed, but because of how well the company treats its customers.
Now that\'s something that all telephone companies should keep in mind.

The study found that there was a direct correlation between buying
intent and a customer\'s experience with a company\'s consumer affairs
department. In fact, the study discovered that when consumers were
satisfied with the way a company had handled their complaint, they
became more loyal than customers who had never had complaints to begin
with, which is really a very interesting revelation. It\'s kind of
converse to what we might have expected. You\'ve had a problem, but
because the company satisfied it, that customer became even more loyal.

But there was a word of warning there that should be issued to companies
that use 800 numbers to handle consumer complaints. If it isn\'t user
friendly, customers are likely to hang up and take their business
elsewhere. If an automated 800 number gives consumers a long list of
options without the ability to speak to a human being in a short period
of time, the customer is going to walk.

So this study should really serve as a guide for businesses: Take care
of your customers and they\'ll come back to you. So given this evidence,
it seems to make good sense that businesses would provide excellent
customer service. Now, I believe there are a number of reasons that
consumers are experiencing frustration in dealing with it. I think that
the two preceding speakers have hit on some issues, but let me just add
some thoughts to it.

First off, I think automation is \-- I hate going into \"voice-mail
hell.\" I hate going into selections of menus where there are six,
eight, nine choices and I\'ve forgotten the first four before I get to
number five. You know, this drives consumers nuts, I will tell you. So I
find that sometimes technology gets in the way of service. But whether
it\'s perception or reality, the consumers that we hear from think
companies are not interested in helping them. They find that technology
gets in the way. They want to pick up the phone and hear a voice, hear
someone there to help them.

I think that\'s one of the reasons so many people contact Call for
Action, because we don\'t have an answering service. They get to us
directly.

Secondly, consumers complain because they\'re on the phone for too long.
They\'re being put on hold and they\'re angry.

And then third, consumers are irate when they can\'t get back to the
same individual that they\'ve talked to before and they have to repeat
the story. Now, those are some of the things that we\'ve seen. As I
said, I\'m not going into my consumer complaints, but I will tell you, I
think there are opportunities for all of us to improve the way customer
service is handled and I think the key element \-- and let me repeat it
\-- the key element is training, because information dispensed to
consumers needs to be accurate. Thank you.

MR. GOLDBLATT: Thank you, Shirley. When we set up this panel, we were
trying to think, well, before there were consumer offices, who did
people complain to, and somebody said, Better Business Bureau, and we
said, hmm. So now, from the Council of Better Business Bureaus, Stephen
Jones.

MR. JONES: Thank you. My name is Stephen Jones. I\'m with the Council of
Better Business Bureaus, which is the headquarters or umbrella
organization for the 132 or so Better Business Bureaus in the U.S. and
15 in Canada. We were the people that people went to to complain and we
are the people that people go to to complain about telephones.

I\'m very pleased to be here today. Two ideas have come to me that we
can do to really facilitate our complaint handling. One, we\'re going to
get a button to press so that we can transfer all the calls to the FCC.

(Laughter.)

MR. JONES: And the second was, we plan to impose a confiscatory tax on
most phone bills so that it will cover our phone bills themselves, which
are excessive. As I said, there are 132 BBBs in the United States and we
often rank complaints by the nature of the business. We have 1,059
different types of businesses categorized and for 1999, the telephone
companies, not cellular equipment, just plain telephone companies,
ranked number nine among the 1,059 complaint categories. They were
tucked cozily between work-at-home schemes and used car salesmen. Not to
suggest that the phone companies are in that class of business or class
of salespeople, but I would also point out that for the year 2000, the
first quarter, the number one complaint category has been cellular
telephones. That\'s not including the others, the regular telephones and
long-distance carriers, which if all ranked together, would be higher
than eighth, for sure.

The increase for \`99 in cellular complaints alone has been \-- I\'m
sorry, 2000 \-- it\'s over 400 percent over 1999. So something must be
going wrong or business is certainly burgeoning, which naturally brings
complaints.

I don\'t mean to overdramatize the position of the phone companies with
complaints. In universally used public utilities like telephones, these
always expect to get large numbers of complaints, just because there\'s
a huge number of customers.

Nevertheless, our complaint statistics and from the complaint statistics
and from conversations I had with Better Business Bureau staff and CEOs
in preparation for this forum, it became clear that there are new
problems with telephone service that have arisen since deregulation, and
that the number is growing and that it can be quite serious.

We think that\'s in part \-- and I guess we agree with the other
speakers \-- that it\'s at least in part because of the change in the
nature of the business and the growth in competition and products.

Generally, the complaints we get at the BBB are on wireless and regular
phones, break down into two main service categories \-- billing and the
quality of service. The alleged errors in billing have continued to be
the most common area of consumer dissatisfaction as expressed to the
BBB. The problems are magnified and complicated by two factors. One is
the deregulation of the phone system, causing these incredibly long and
fat telephone bills that are so complicated that most folks \-- and I\'m
not saying just slack-jawed yokels, we\'re talking most folks, whether
they be geniuses or rocket scientists \-- have trouble understanding the
bills. And when they do, they come to the Better Business Bureau and
others \-- but they come to us in large numbers.

The second aspect of billing problems is that even when customers do
understand their bills, and especially when they do understand the
bills, they believe that they\'ve been mischarged, that there are
mistakes in the bills. BBBs report that typically complaints allege
being charged for calls not made or charged for services that have been
canceled, as has been very wonderfully told about earlier.

This billing mess is exacerbated by the continued problems with slamming
and cramming. BBBs across the country still regularly get complaints
from consumers who are unaware that their long-distance carrier had been
changed or that they had \"signed up\" for another service they never
intended to buy.

Which brings me to the second area of frequent complaint, which is
service. The BBB \-- as a rule, we tell people who complain to us, we
ask them if they have already contacted the company to present their
complaint and we ask that they do that before they come to us for help
in presenting a complaint. Well, it turns out that one of the things
most complained of to the BBB is the difficulty customers have getting
through to somebody, a living person at their phone company, someone who
can help them resolve their problems.

Time and again, we\'ve expressed \-- consumers have expressed
frustration at their inability to navigate the voice response menus, as
Shirley and others said. Complaints report that when they get hold of an
actual phone company employee, the person cannot or will not help them,
shunts them to another department, still another menu. Complainants
report that when they do get a service rep, they are frequently brusque,
rude and unhelpful. Complainants to BBB on cellular phone services have
also claimed the representatives will make promises that they do not
keep, for example, changing billing plans or termination of a service,
and thus requiring repeated attempts to straighten things out with the
company and calls to the Better Business Bureau.

Several bureaus report complaints to the effect that phone company staff
would refuse to transfer complaint calls to the supervisor or refuse to
identify themselves or their supervisors. This is very frustrating to
consumers and they express their frustration to us. It genders some
really ill will towards the phone companies. And it helps nobody.

Sometimes when consumers complain to the billing phone company about
being crammed or slammed, the companies say they are helpless, as has
been said before, or other even more inventive excuses, such as that
they cannot keep fraudulent long-distance switchers or people signing
people up, off of their bills. Now, there might be a truth in that, but
it\'s certainly cold comfort to the customers who promptly and
continually see the phone company as complicit in the scam.

We\'ve also received complaints alleging long periods on hold, being
sold one plan and signed up for another plan, these kinds of things that
have been enumerated here today better than I can do.

But one thing I can tell you about is the Better Business Bureau
experience with presenting complaints, and it\'s like the consumers\'.
Not surprisingly, their complaints mimic the complaints we hear from
consumers. It\'s very difficult to get through to phone companies \--
sometimes, to get through to the right people at phone companies. It\'s
hard for the Better Business Bureau to do, even though we\'ve had a
relationship with the phone companies in handling complaints for 75
years.

A number of unscientific conclusions that some Better Business CEOs have
drawn and told to me \-- I\'d just like to report a couple of sort of
anecdotes here. One Bureau noted that they get phone complaints from
both big companies and small companies \-- start-ups. They get
complaints from old companies and they get complaints from new
companies, but it\'s been their experience, at least some Better
Business Bureaus, that the older and larger companies will handle the
complaints in time, while the ones in the smaller start-up companies
tend to fall through the cracks, perhaps because of lack of resources.
We don\'t know for sure.

But they\'ve also said that, for example, one large, regional phone
company, one of the Baby Bells, I guess it probably was, when people
complained to the Better Business Bureau, and they do by the hundreds,
they had, the Better Business Bureau had a great deal of difficulty in
reaching the right person to contact to fix the problem. It ends up that
it took an average of two months to get a complaint resolved when the
Better Business Bureau is working on it. And that\'s certainly not a
satisfactory way of handling complaints.

It probably is the belief of the Better Business Bureau in some of these
cases that the company simply does not put the resources into handling
complaints, but they\'re putting the resources into new products and new
services.

We still do receive reports on sales tactics. We receive them
particularly on the people who get slammed and crammed. It happens
despite the assurances that we keep hearing that this is a problem
that\'s being addressed and is over. It\'s typical at BBBs across the
country.

We will say that most phone companies that we deal with give good
service and also are prompt in fixing the complaints. But the problem
does not seem to be going away and it seems to be getting worse among
the phone companies and the phone service providers. And we are there,
as the Better Business Bureau, to help and are ready, willing and able
to work with communications companies to improve complaint resolution
and increase customer satisfaction. Thanks.

MR. GOLDBLATT: Thank you. The next consumer group we thought would be
represented is \-- I don\'t know about many of you, but as many of us
get closer to a magic number which keeps getting lower and lower, we get
cards in the mail to join a certain major organization, AARP, which now,
I guess, is lowered down to 50. I think it\'s one of the largest
consumer organizations in the country now, isn\'t it, Jeff?

MR. KRAMER: I believe so, yes. Thank you, Roger. I\'m Jeff Kramer. I\'m
a legislative representative in federal affairs at AARP. It\'s a
pleasure to be here today. I want to thank the Commission for inviting
AARP to participate. And I also want to commend the Consumer Information
Bureau for being an essential link to the consumer community. It\'s
really nice to have a link between consumers and the Commission, which
heretofore was nonexistent. So I want to thank you for that.

I don\'t think anything I\'m going to say today is news, but hopefully
we\'ll bring it to you in an AARP-type perspective. Certainly the reason
we gave for a lot of the complaints from consumers is because they feel
that they\'re getting the runaround, they can\'t get a live person, and
we\'ve heard that a number of times. And I think it\'s important to
point out that what makes this more frustrating for our members is that,
unlike other industries where you can go to a store and talk to a live
sales representative or talk to someone when you make a lot of other
retail purchases, with phone service you can\'t. You\'re talking on the
phone. And so they move you around and transfer you around, that\'s the
only option you have.

You know, unlike years past, when you could go to a phone company and
pay your bill and talk to a consumer representative, a lot of those
offices are no longer in existence, so consumers have to rely on that.
And for our members, that becomes very, very frustrating when you\'re
pushed around.

I also want to point out, I think \-- and I\'ve mentioned this at some
other forums when I talk about other issues related to telecommunication
\-- is good customer service is good for the carriers, too, specifically
for AARPs\' members. As competition has started to develop in the
telecommunications industry and it\'s thriving in a lot of areas, our
members are starting to get into it. More and more are on the Internet,
more and more are buying wireless phones, more and more are getting
advanced services regarding long distance or local service.

But a lot of them are \-- when they do start to do that and find that
they have bad experiences \-- are saying, no, no more, I\'m just going
back to what I have, keep me away from all of this. So it\'s in the
carrier\'s best interest, really, to deal with these consumers and try
to handle their complaints as expeditiously as possible.

With that said, I want to mention that, you know, again, AARP gets
complaints from members, but we\'re certainly not the first line, I
don\'t think. I think by the time someone gets to call AARP or e-mail
AARP or, you know, write AARP, that they\'ve talked to someone else
about it and their complaint hasn\'t been resolved.

Still, in 1998, we got 178 communications from members regarding
customer service in telephone service. In 1999, it doubled to 346, so
just in a year, we got a whole different amount. And if 2000 is an
indicator, in the first five months we\'ve gotten a whole bunch of them.
In fact, the ones I\'m going to point out today were just received in
the month of May. And that\'s where I\'m going to go. I\'m going to
quickly go through some examples which I think provide a range of the
kind of complaints we get from our members looking for assistance.

We have one who says they called their company \-- they\'re on a fixed
income, like we\'ve heard from the Gettysburg Center, and they\'re
really concerned about a lot of the line item charges that are on their
bills and what to do about them. So they called their carrier to see if
they could have it waived. They got no clear answer and were told to
call the county and were told that the county \-- and this was after,
they said parenthetically, after they had gone through the voice-mail
system and all of that and it had taken a while to get to a live person.

They called the county who, of course, had no idea what they were
talking about, and sent them back to AT&T. Anyway, the bottom line is,
this took months and months to resolve the complaint. And again, these
people were very frustrated \-- and obviously, the charges were not
waived \-- but before they could even get an answer, it was quite a bit
of time.

I have a customer, a member of ours, who\'s looking for cellular service
and talked to a customer service representative of a company, explained
what that person\'s needs were. He said he didn\'t need it for much, he
was just going on a trip, he wanted to have something for emergency
purposes. He spent a lot of time with this customer service
representative. He went on the road, hardly used his phone. He came back
and got a bill of \$672 and tried to call this person to find out what
was going on. And he said, well, this is the service you signed up for.

And the reason I bring this up is not for the amount as much as, here\'s
a consumer who spent time talking to the customer service
representative, asking for something specific, and I\'m sure the plan he
asked for was not, you know, \$672 worth of services. He just wanted to
use it for emergency purposes. Again, one of the things I\'m going to
get to is the fact that I think the carriers need to get to know their
customers.

Here\'s another one again from last month. It says, \"Dear AARP, Please
help me,\" is the first line. \"This company is trying to collect money
from me and I\'ve never used their services and each month the costs
keep escalating.\" And this person has never even, you know, signed on
to the service. I\'m not going to go into the details of it, but there
are a number of follow-up letters to a number of different agencies and
as of yet, and I called yesterday, this hadn\'t been resolved yet. So
this person continues to get higher and higher bills for a service they
claim they never had.

Another here, an 85-year-old person who is an AARP member just
discovered that they\'d been paying \$5 a month to lease their phone
since 1970. So for 30 years, they\'ve been leasing their phones. The
consumer says they weren\'t notified during deregulation that they no
longer needed to lease their phone and they called the carrier to see
what could be done. Well, the carrier did terminate the contract. This
consumer was going into \-- they would like a bigger refund. But the
point I\'m making here is, again, maybe what the carriers need to do is
look at their records and say, boy, we have a whole list of people who
are leasing their phones. Perhaps we should send something to them,
letting them know that they don\'t have to pay \$4.95 a month, they can
go out and buy a phone for a whole lot less and not have to, you know,
continue to lease this phone for all these years.

And the final one I have is, again, one where it\'s a daughter of one of
our members who is in ill health, who had their phone service
terminated. And the mother was afraid to tell anyone, but they obviously
couldn\'t get a hold of her. They were told it was done for nonpayment.
Now, this person doesn\'t understand why, because she had been paying
the bills. Though they weren\'t coming to her, she thought she\'d been
paying the bills.

Anyway, she talked to the phone company, said, we need to restore the
service, send the bills to me. This was in February she made the call,
the service was supposed to be restored that next week. It was into
April before the service was restored. So this older woman was without
service for literally three months for nonpayment of a bill that the
company later admitted was actually paid on time.

So these are the kinds of complaints we\'re getting from people. You
know, it runs the gamut. So what do we do? You know, obviously AARP
wants to work with the companies, work with the carriers, make sure that
the information that they need to get is getting out to our members.

Some of the things I would bring up and I think people have mentioned
it, one of them is a working phone number. And by working phone number,
it means a phone number where maybe a senior can call to get someone
directly. They don\'t have to go through, you know, a whole voice-mail
system. They can actually talk to someone who can deal with senior
interests on the phone. That\'s very important.

What\'s even more important is, if they\'re calling with a customer
service complaint or a customer service issue, that there not be a
marketing person trying to sell them additional services or tell them,
you know, this is what you need to do. You know, most of our members are
pretty savvy and if they want an additional service, they\'ll make that
call or they\'ll tell the customer service rep, well, maybe I need a
different service. Can you send me to someone who does those things?
Because again, people are turned off if they\'re calling to register a
complaint. They\'re saying, well, that\'s too bad, but how about if you
buy this additional add-on, then you won\'t have to worry about this
anymore \-- those kind of things.

And if you\'re marketing someone, tell them in plain English what
they\'re getting. Let people know, if there\'s a contract, they\'re
signing for a two-year term. Make sure they know that they\'re signing a
contract for a two-year term, not just for month-to-month service,
especially older people who aren\'t used to getting into wireless
contracts and things like that. It becomes a problem. Or any kind of
service you\'re trying to sell to a consumer, make sure they understand
the terms and conditions as best as possible. Then you alleviate a lot
of these concerns down the road.

And I guess the final point is really for the carriers to get to know
the customers. Spend time \-- I know big business has millions of
customers. But if there\'s any way possible to do a little more personal
relationship with a customer, to get to know what their needs are, the
services they\'ve gotten in the past and how you can help them to
enhance their, you know, their experience with the carrier, it would be
helpful. Thank you.

MR. GOLDBLATT: When we were setting up this panel, I was going over all
of the groups that we should include and who handles consumer
complaints, and I guess, subliminally, the TV was on Channel 4. And I
kept

dreaming \-- Liz Crenshaw, Liz Crenshaw. And next is Liz Crenshaw.

MS. CRENSHAW: If you\'re dreaming about me, I\'m going to start worrying
about it, actually, and let my husband know.

(Laughter.)

MS. CRENSHAW: I am the consumer reporter with NBC-4 here in Washington.
We do not call ourselves a consumer complaint office. We don\'t pretend
to solve consumer complaints. We try to cover stories that we think will
help people save time, save money, etc.

Having said that, of course, we get hundreds of phone calls a week from
people who want us to solve their consumer problems and we try to direct
them to people who can, in fact, help them. That\'s what my goal is, is
to not let people think that if you call a TV station, the TV station is
going to call Bell Atlantic or AT&T or Sprint and solve your problem,
because in my opinion, that just solves that person\'s problem, but it
doesn\'t solve anybody else\'s problem.

So we tend to do stories when we think the problem is big enough.
Unfortunately, I think we do too many telephone stories. And what that
means is, I think we do too many stories about people very confused
about their telephone service.

I\'ve been covering consumer stuff since 1982, so obviously I covered
the breakup and obviously we had lots of problems in the early days. But
I can tell you that, outside of used cars, telephone complaints tend to
be right up there on the list. And I find that to be a disturbing sort
of trend. I mean, obviously telephone service was never meant to be
terribly complicated. People are harkening now, in 2000, back to the
days when we didn\'t have all these choices. We try to convince people
on the telephone that because they have choices, maybe they\'re saving
money. But the people that we get to are at the point where they\'re
saying, I don\'t care anymore about the saving of money. This is driving
me nuts.

I had the researchers in my office \-- and I won\'t go through \-- this
is just the past two months of complaints, of just phone complaints. It
is everything from cellular to straight Bell Atlantic service to AT&T to
MCI to Sprint, everything from people being overcharged and not being
able to get a customer service rep to talk to them, to actually being
what they call \"lied to\" by customer service representatives.

My mother calls me on a regular basis and most of her complaints are
about her phone bill. A lovely woman, but I\'m beginning to go crazy.

The truth is, I\'m confused about my telephone service. That\'s not
good. I think that I\'m a relatively intelligent person. I have many
phone bills that come to my house. I think one of the important things
that these telephone \-- the variety of telephone services that we have
must do better is they must communicate better with their customers. I
am not talking about a tiny little insert slipped into a phone bill that
gets thrown away. I can tell you that out of the blue, in my mind, last
month, I got a brand new bill from AT&T. I\'d never gotten a bill from
AT&T in my life, and I\'ve had AT&T service, I think, since the day I
bought my house. Why did I get a bill from AT&T? Because AT&T decided
that they\'re going to bill my long- distance separate from my local
service. And since I don\'t use that much long-distance at this
particular phone, I\'m only going to get my bill every three months.
What are they talking about? I did a story on this and I still didn\'t
understand the bill when it came in.

There is a serious problem out there, I believe, in the fact that the
phone services are making decisions about how we\'re going to be billed,
the kinds of services that are being offered, and whoever is writing the
inserts, whoever is deciding how to communicate that to customers is
doing a lousy job. I\'m sorry, they\'re just doing an absolutely lousy
job, because consumers are terribly confused.

Now, the people that write to me, I mean, we\'re talking letters that go
on and on, you know, page after page: I called at 1400 hours, I called
\-- I mean, these are not people that are confused because they have a
low IQ or because they never had phone service before. These are people
that have had phone service, they\'ve had DSL lines, they have multiple
cellular phone services. They can\'t figure it out, and obviously you
don\'t need me to go through every little detail in these complaints.
Some of them I can\'t read here. It\'s a public forum and there\'s words
I can\'t use here or on television.

People who are trying to figure it out and then, when they make the
wonderful phone call to the place where they\'re supposed to call,
again, as other folks have said, they\'re on hold, they punch a series
of numbers, they get to a person who tells them that they\'ve gotten to
the wrong person. They ask to be bumped up, they can\'t be bumped up,
they have to start the process all over again.

Obviously, I understand how expensive it is for customer service people
to be on the phone with a customer for a long period of time. I did a
story called \"America on Hold\" last month. We know how expensive it is
for a live person to handle a call. We know that companies would much
rather you solve your problem through a series of menus. We understand
it\'s a monetary thing.

The bottom line, though, is people have to be able to understand what
they\'re paying. And the smart people are going to try to figure it out.
And when they can\'t figure it out by the stuff that they get sent in
the mail, they\'re going to call you. So my position is, make the stuff
they get in the mail understandable, and guess what? You\'re not going
to get that many people calling you, trying to figure out what in
heaven\'s name is wrong with their phone bill.

You know, we\'ve got complaints, everything from cellular to regular
service. The Guardian Plan, you know, everybody at Bell Atlantic got a
lovely little note a couple of months ago that said that your guardian
service is going up *X* number of dollars. Do I have guardian service?
What is guardian service? I thought I declined guardian service 16 years
ago when it was offered to me, because phone lines inside homes don\'t
break very often. But I get a note in my phone bill that says that my
guardian service is going up.

Well, I figured out that I didn\'t have guardian service and that they
were just warning the people who did, but guess how many phone calls we
got from people saying, do I have guardian service, and why is it going
up? First of all, they shouldn\'t be calling me about this, right? And
if the note in the phone bill, or a separate letter coming to them had
said to them, this is guardian service, you may have it, you may not
have it, and if you do have it, it\'s going up \-- guess what? Nobody
would have called me, you or anybody else.

I know I seem kind of agitated by this. I am. It\'s my time. It takes a
lot of time in the consumer unit at NBC-4 to deal with this, and
personally, it\'s a waste of time. I mean, it\'s truly a waste of time.
These complaints are not because, you know, the company ripped me off
and they overcharged. These complaints are because there\'s been some
kind of error or the customer doesn\'t understand what\'s going on. And
my position is, if the initial material to them was clearer, they
wouldn\'t have this problem.

And I think it goes everywhere from selling original cellular service
\-- I bought a new cellular service last month. I got my bill yesterday.
Honest to God, I cannot understand one charge on it, because I have a
crossover service. You know, I had a service before and now I have a new
service and they prorate the new service onto the \-- okay?

And then the new phone bill with all the lovely words on it. I mean, a
guy here tried to type for me all the new words on his phone bill. I
thought he couldn\'t type because it was all misspelled. I checked. He
typed every word right. I can\'t say half of them, so I\'m not even
going to go through that.

Anyway, you don\'t need to listen to me go on and on. The truth is that
obviously I believe that competition is a great thing. And I think if
people can get lower prices, that\'s all good for the consumer. It
doesn\'t help, obviously, if they spend most of their time confused
about it, because guess what? They think they didn\'t get a good deal
after all that. And in fact, they may have a good deal. But the bottom
line is, if they\'re confused about their charges, if they don\'t
understand their phone bills, if they have to spend 20 minutes every
month figuring out who to send what check to for what service, no matter
how much money they save, they\'re still pissed off at you.

So I would say, you know, figure out a way to communicate clearly with
these people and they actually might really want to do business with
you. Thanks.

MR. GOLDBLATT: As people have pointed out, the article like the Chairman
mentioned that Caroline Mayer of the [Post]{.underline} wrote this
morning \-- I\'ve done consumer education since 1969, 30 years. I got
messed up. It happens to everybody. It\'s very, very confusing and while
a lot of the carriers are doing the right thing and answering right,
it\'s the perception of consumers. If they perceive that they\'re
getting bad customer service, that\'s bad enough, unfortunately.

The way we\'ve crafted the day is we\'re going to take a little break.
Then we\'re going to have a panel that talks about special constituency
issues. There are special groups of people that a lot of service
organizations unfortunately forget. And then we\'re going to say, okay,
we\'ll tell you all the problems, we\'ll bring them to the forefront.
We\'re not going to regulate, we\'re just telling you what the problems
are. But what is good customer service? Then we\'ll have an expert break
down what exactly is good customer service.

So enjoy the water, the coffee, the restroom and we\'ll have, like, a
five-minute break. Thank you.

(Whereupon a short recess was taken.)

MS. PELTZ-STRAUSS: We\'re going to try to begin. Thank you. Hi, I\'m
Karen Peltz-Strauss and I\'m the deputy bureau chief of the Consumer
Information Bureau. And we are delighted to have you all here.

I just want to say that, of course, as we\'ve heard this morning, none
of us are immune from the problems occurring with customer service. I,
myself, am up to here with a maze of prerecorded messages. I\'ve had my
own share of horror stories over the last few weeks. I\'ve been thrown
in mazes, not been able to get out of them, only to be put on hold and
then be disconnected.

I\'ve tried to call back and cancel service and still not gotten
through. I think that that might have been intentional. But the greatest
indignity was recently when I tried to inquire about my long-distance
service and was told that I could not even access my bill, could not
ask, even begin to ask any information about my bill because the phone
service was listed in my husband\'s name, despite the fact that I had
signed up for the service. I could not figure out why they put my
husband\'s name on the account. They would not even let me ask about the
service.

But as hard as it is for many people to access information, it\'s even
harder for special constituencies to access this information.
Prerecorded announcements are not accessible to deaf and hard-of-hearing
people. People with cognitive disabilities have trouble accessing them
and responding quickly. People who are senior citizens who have slow
response time have difficulty. People who speak foreign languages and
may not understand the prerecorded announcements may have difficulty.

These are the kinds of things that we\'re going to hear from this
special constituency panel. I thank you all for coming and I think we\'d
like to begin with Charlie Crawford from the American Council of the
Blind.

MR. CRAWFORD: Can everybody hear me all right? How about that? Is that
about right? Oh, it\'s working, was working. Is this working, can people
hear me all right? Okay, great.

To hear the speech from ACB, press one.

(Laughter.)

MR. CRAWFORD: I\'m pleased to have been invited and I thank the FCC for
acknowledging and extending to the blindness community an opportunity to
share with you our perspective on the facts that have been presented
this morning.

I think it\'s fair to say that coming up here to the podium, I felt as
if I share a great common confusion with everybody with respect to what
it is that we can reasonably expect within a competitive environment.
But there are clearly some things that I think not only are a question
of common sense and courtesy and a matter of law. There are things that
we really need to pay attention to if we\'re going to have a society in
which the various components of that society can participate fruitfully
within the service environments available to them.

Well, what does all that mean in English? Essentially, the big fact
about blindness, and it really is no secret, we can\'t see. And the fact
that we can\'t see does create a problem when you send us a print bill
or when you put something on a TV screen that\'s a graphic or a text
that is not spoken that advertises a particular service or a disclaimer
associated with the service, so that the person trying to make a
decision relative to what they want to do with this information is
really at a loss to properly be able to handle that information and to
respond to it in a way that\'s productive both for the company and the
person.

So unnecessary and difficult situations are oftentimes created simply
because \-- it\'s not just the lack of clear information, the reality is
the lack of any information.

So what we are here to probably try to share with you as first priority
is, take a look at the ability of your company to properly display
information to a person who is not looking at it. Now, we have some
natural allies in our presentation here. One of them is that, for
example, with cell phones, we all know that it\'s very difficult to
drive and talk on the phone and monitor the little display and do
anything but look out the windshield.

The issue becomes, how do you get that person who\'s driving to safely
use a cell phone and at the same time be able to drive safely? And to
use that cell phone so that you earn money? Well, there are some
strategies that are being developed in technology that I think make a
lot of sense, not only in that application, but also in terms of blind
persons \-- I mean, if you have a phone that talks and you can hear what
it\'s doing, as opposed to having to look at it; if you have text to
speech conversion in your phone system, so that when you\'re on a cell
phone, you can actually listen to what\'s going on on the Internet,
versus trying to read the Dow Jones while you\'re steadily heading
towards the front of that bus in front of you.

Those are things that I think we should take advantage of and think
about when we think in terms of the markets that we utilize, so that
blind persons are a natural ally in many ways to the basic function of a
telephone, which is an audio output. So we believe that that\'s one
issue that has to be handled correctly.

A second issue has to do with billing. If you send me a print bill, the
likelihood is that I\'m not going to read it. The dog doesn\'t care
about it, my mother\'s in Florida, and your getting paid is growing more
and more distant. So there have to be strategies implemented to provide
the billing information in an accurate way to a person who is blind. Now
we\'ve got some real issues with that with various phone companies, and
other phone companies have been real cooperative and helpful.

So I think that it\'s important that all phone companies take a real
close look at how you do your processing of your bills so that ways to
produce that bill in alternative formats, whether it\'s Braille, whether
it\'s a file on a disk, whether it\'s on the Internet \-- strategies
that work to give the same information to somebody who is blind should
be incorporated into your billing cycles. And that\'s important to do.

There are certain representations that have been made to blind people by
customer service folks that border, in some cases, on insanity and in
other cases are just basically a little bit of deceptive practice. To
tell a blind person that they don\'t have a right to receive information
in an alternative format is not only not good customer service, but
illegal. To provide people with information that is only half the
information because, golly, if we had to print up this whole bill in
Braille, it\'s going to take four pages rather than three, that leaves
the person that much lacking in the information that the original bill
has. To tell somebody that what comes in the Braille bill is not
necessarily a representation of what the real amount owed is really kind
of frustrates the purpose of sending the bill in the first place.

I mean, those are issues that \-- common sense dictates we need to make
sure that we provide people with information that they can use. And I
want to take just a moment to wrap up and maybe expand the commentary a
bit. This morning we\'ve heard a parade of consumer complaints, but
we\'ve also heard some sympathy towards telephone companies that are
trying to compete in an environment that is so rapidly changing that the
nature of telephones themselves may not be recognizable within 10 years.

We all know that the electric plug beside you can carry data on a
magnetic field around that coil. And we all know that if everybody
suddenly could just plug into the electric company\'s socket and get
that data, that spells big trouble for a lot of companies. That\'s one
big threat out there. There are a lot of them.

And so we are sympathetic to the fact that phone companies, while trying
to build business, are also trying to find ways to preserve the way that
you deliver that business and recapture your investment, which is
substantial in most circumstances, in order to get the job done and to
have the product to sell. And the product that gets sold may not even
exist a year from now. So we\'re very sympathetic to that.

I think that we all need to start realistically thinking in terms of,
what are the drivers in the equation that cause customer service to be a
problem? Clearly there\'s a problem in communication between one part of
a company and the other part of the company and all that sort of thing.
But what really drives that? Well, it\'s the competitive, chronic need
to be out front, chronic need to be coming up with something new, never
really having time to complete the loop of communications, always
pushing your company in new directions so that it expands so far that
parts of it no longer feel that they\'re related to other parts of it.
We understand that, and so that\'s the sympathy part.

Now, here\'s the threat. I believe that it has

been mentioned more than once this morning, consumers are not only
confused, but they\'re getting angry. And that anger is ultimately going
to translate into either one of two things \-- some level of
constructive action on the part of consumerism, whether it\'s blind or
otherwise, or together, that will result in demands on Congress, either
you fix this problem or you\'re not going back to Congress. I don\'t
care whether you\'re Republican, Democrat or whatever.

That\'s a real possibility and I think it\'s something we need to think
about in the consumer community, because really, we cannot continue to
exist with any degree of comfort if we\'re not able to realistically
relate to the companies that we deal with. That\'s one issue and an
important one. I know \-- almost out of time, thank you. Talking
competitively, this is subject to an ABR.

The other issue, and I think it\'s important, is that we as consumers
and as industry, need to settle on ways of communicating with each other
which are mutually respectful and deliver on the product that\'s
represented. Otherwise, we will sort of dissolve into this kind of
litigious and, I think, very destructive environment. And since I\'m
almost out of time, I guess I\'m almost out of time. So good-bye. Thank
you.

(Applause.)

MS. PELTZ-STRAUSS: What can I say? That was so eloquent, as usual. Thank
you so much. And the next speaker is Mattie Robinson. This morning we
heard from Jeff Kramer on some of the problems that senior citizens
experience, and Mattie will tell us firsthand the kinds of things that
she has experienced and the kinds of special needs that senior citizens
might have with respect to customer service.

MS. ROBINSON: Thank you so much. I am very happy to be here and I must
say, when I was first approached about coming, I certainly was very
reluctant to say yes, because there is so much I needed to know, rather
than to come and to talk about what I already know.

I am delighted that this kind of information is being made available
here this morning. Many of us really need it. And as a retired person
after working over 35 years in public education and then in private
education and then finally making a second retirement and now
approaching my 80th birthday, I just feel that I\'m somewhere \-- I just
need help. And one of the things I\'ve learned this morning is that
maybe, after all, I do not have to go and try to find a psychiatrist to
find out what\'s happening to me mentally.

Because what has really driven me up the wall is this terrible increase
in the charges that I have to make in so many instances, particularly
with the telephone service. I remember when my bill of six months ago
went up to what I said never a retired person should be paying. I called
and made threats that I would certainly have my phone disconnected. I
just didn\'t need anything that expensive in my household at that time.

Well, when I finally got to a person, a real, live voice, I was very
thankful and told her exactly what I wanted \-- all the explanations to
be explained, why my phone bill suddenly almost doubled in cost, and if
that this is really true, then I would have to have the service
discontinued.

Well, when she finished telling me, oh, yes, I\'ll tell you all the
things you need to know, I found out at the end of that conversation I
needed a lawyer, and I didn\'t have one. I didn\'t have anybody in my
family that I could even go to for legal advice. Then I went around and
started talking to some of my former co-workers, my church members and
what not, and found they were having the same problem.

So then I said, well, I guess I better not have the phone disconnected
now. If I have to, maybe go borrow the money in order to keep the
service. But what it all boils down to is what I heard this morning from
the AARP presentation, also from Liz Crenshaw and then from the Better
Business Bureau, because that was one of our next steps, do we go to the
Better Business Bureau? Well, I found out this morning, they may not be
able to know any more than we know.

So I\'m here to plead on the behalf of the senior citizens who have long
retired, who are not up to par in all the new technologies, help us to
survive through this crisis by being more communicative to us. And let
us know why certain changes are being made.

Liz Crenshaw mentioned something that has just happened in our
household. The last two months, we are getting these separate bills from
AT&T, and we just could not understand, well, why all of a sudden this
change is being made and we were never told. I did, just two days ago,
before I even knew about this panel \-- said, well, I\'ll pick up the
phone and try again. And the first thing I did receive was this long
wait. And I was just too busy that day. I have other things I have to do
as a grandmother and whatnot. I could not wait to get an answer. So I
put that on hold. I said, well, what will be my next step? I\'ll have to
call and be put on wait again.

So I\'m suggesting, as has just been mentioned by the speaker before me,
that if we could get more help in understanding the changes, if we could
get a real, live person to talk to, and if we could get some inkling
that the service is going to get better. It just seems to me that in the
last two years, the service has been getting worse. Last year it got
worse, and again this year, I don\'t see where there is any improvement
whatsoever. So I speak now as a retired consumer who has been around for
many, many years and desperately in the need of help of understanding
the new technology in the new age. And we would appreciate any help that
you can give us, so that we won\'t feel that we have a low IQ all of a
sudden in our old age.

(Applause.)

MS. PELTZ-STRAUSS: Thank you so much. I think that all of us have felt
that we have a low IQ at various times. I can tell you that the last
time I purchased a telephone, I purposely purchased one with a
speakerphone so that when I\'m put on hold for very long periods of
time, I could press the speaker and do things around my house. However,
that doesn\'t work either, because I didn\'t understand the directions
for the speakerphone. So when I have called and been put on hold,
there\'s two problems. First of all, the music in the background is very
low, I have to keep my kids quiet. I waited on one particular occasion
\-- on actually one particular occasion, I\'m embarrassed to admit, I
waited and I waited and I waited. Finally somebody came to the phone. I
pressed the wrong button. This is about 30 minutes of waiting. I pressed
the wrong button and I had to start all over again.

(Laughter.)

MS. PELTZ-STRAUSS: I wanted to cry. I thought, finally I had the
solution and I blew it.

Okay, the next speaker is Claude Stout. And Claude comes to us from
Telecommunications for the Deaf, Inc., which is an organization in
Silver Spring that specifically works on telecommunications issues for
deaf and hard-of-hearing people.

MS. STOUT (Interpreter speaking): Thank you, Karen. I\'m going to try
and stay within my limit of five to ten minutes. I\'m going to try and
identify the different problems that we face in our daily use of the
phone. And then I will try and present some solutions.

There\'s a problem, but I also want to comment on several things that
have happened in our everyday experiences. Are you following me now
okay? We deaf and hard-of-hearing, and deaf and blind, we use a relay
service in many different situations. We use a telecommunications relay
service, but we don\'t have the same billing arrangement while we\'re on
the TTY to TTY calls. And that\'s been a big problem for us. Often, we
end up paying more than we should.

Another thing, when we use TRS and long-distance calls, very often we
don\'t know that our calls are being charged through a default
long-distance company, not to our preferred long-distance company. Also,
when we make a TTY call, we look at the blinking light on our TTY
machine and we see the light blinking and we think either the line is
busy or someone is not there. But in reality, the blinking light was
from somebody\'s voice provided by the phone company.

Other times, if we see the light blinking on the TTY, we think maybe
it\'s voice-automated or it\'s voice mail, but we can\'t tell the
difference. We want to participate in the wireless phone market with the
cell phones, with the TTY attached to that. Now we have that in analog,
but we have yet to have that in the digital mode. But that causes a lot
of problems when we use TRS, the Telecommunications Relay Service.
Either TRS will not allow us to proceed with the cell phone through TRS,
because of billing issues \-- very often, TRS doesn\'t have the billing
arrangements already set up with the cellular companies that we have a
contract with.

Very often, us deaf and hard-of-hearing people and deaf/blind, we don\'t
have access to information. You don\'t see much information services in
the papers and in magazines. We don\'t see enough of the
telecommunications companies, of their staff and their administrators
going and intermixing with us at the meetings and social events or in
conferences. There\'s not enough of them around.

Often, when we call cellular service reps with any particular phone
company, we call on the TTY and we wait and the person who answers the
phone is looking around for a TTY. They find the TTY buried under the
desk and that TTY has so much dust on it, they have to dust the TTY off
and the deaf person is sitting there waiting. And we\'re thinking that
they\'re not going to respond to us, so we hang up.

I want to share with you several situations from observing the
deaf/blind consumer. They can\'t access a pay phone because they don\'t
have the large print or they don\'t have the Braille capabilities.
Another thing with the deaf/blind that\'s really frustrating is they
can\'t enjoy the wireless pagers because they don\'t have Braille
capabilities or they don\'t have large print.

Often, also, with a deaf/blind person calling the relay and having
access to voice mail, the voice-mail information comes in so fast that
the deaf/blind person doesn\'t have the opportunity to ask TRS operators
to slow down. The voice mails are often automated information in the
system. It just comes in so fast, and they don\'t have the capabilities
to request them to slow down that information so that they can read it.
Very often deaf/blind are frustrated with the cell phones themselves.
They don\'t have the amplifiers.

Now I want to present a solution. For the phone companies who are
staying in tune with our needs and our desires and our wants, with this
service, we encourage you to include us in your consumer advisory
boards. We\'re talking about specific service like TRS, so if you
develop the new product or you design the new service, please do involve
us. Do include us. You will be surprised at how much we can offer with
ideas and recommendations, than if you don\'t involve us upfront.

We really want to see TRS work out with different long-distance phone
companies so that when we identify that I would like to use my preferred
long-distance company carrier, I would like TRS to proceed with that and
not put us onto the default situation.

It\'s not happening now, but we very much want to see TRS become
multivended. That is, we want more competition for TRS. For example, if
we dial 711, we

want \-- on mine with 711, it will tell you what my preferred TRS is. It
will tell you which mode of communication that I use, if I use the TTY
or VCO or ASCI. That way we don\'t have to repeat ourselves every time
we make a TRS call.

How much time do I have left? Okay.

This material I have, we have a chart of voice compared with TTY
intercepts. That way, if we dial the wrong area code or if we \-- if we
don\'t know if the number\'s been disconnected, you give us a TTY
intercept so that we\'re not struggling with this blinking light with no
information.

I want to share with you all one important situation where a telephone
company really involved us in trying to instruct us on their services.
One company here in the Washington, D.C./Maryland area, Bell Atlantic,
about two or three weeks ago called a person from Massachusetts. This
gentleman just happened to be deaf and came down to Northern Virginia to
give a speech to deaf senior citizens. The deaf senior citizens were
just puzzled about the different lines on the phone bills. So this
person is explaining to them in straight ASL, making everything, making
the message go through perfectly clear so they understand everything.
The message was so clear that these about 60 deaf senior citizens were
just so overjoyed that they understood more what was involved with each
line on their phone bill.

That\'s one example in where we deaf and hard of hearing and deaf/blind,
we often ask for something and we don\'t get enough support. I ask that
that kind of support be provided to us from other telecommunications
companies.

I thank you all and I thank the FCC for providing us with this
opportunity to give this feedback. We think this industry\'s \-- to
increase these goals for us in telecommunications. And thank you, Karen.

(Applause.)

MS. PELTZ-STRAUSS: Thank you, Claude.

Ahora quiero introducir Gloria Verduzco. Okay. Now, for those of you who
may not have understood me, I said, now I would like to introduce Gloria
Verduzco. I imagine that there are many situations that she has
presented to her or her constituency where they may not understand
something the customer service people say and we\'d like patience in the
process. Go right ahead.

MS. VERDUZCO: Good morning, ladies and gentlemen. My name is Gloria
Verduzco, and like we say back home, buenos días. I work for the Federal
Communications Commission at the Gettysburg Consumer Center, but I\'m
also here to represent Hispanics. I handle the Spanish line for the
entire United States. I handle all incoming calls and I even get calls
from Latin America, Spain and Mexico.

In that capacity, I answer calls regarding all telecommunications
issues, but the main problem facing Hispanics is telephone customer
service and billing. The callers are from all groups and all
socioeconomic levels, all the way from professionals to blue-collar
laborers, homemakers or retirees, but they all share a common ground
regarding complaints of telephone service.

I\'m not here to point fingers or to play the minority card, but with
the hope that rather, after this forum, we can work together to reduce
the frustrations encountered by Hispanics regarding telephone customer
service complaints and improved relations with the Hispanic consumers.

Over and over I listen to consumer complaints, and the main issues cited
by Hispanics regarding telephone company representatives are, being
treated in a condescending manner, being spoken down to, treated with
arrogance, rudeness, impatience, apathy, threats and intimidation,
broken promises, being put on hold with long waits when they request a
Spanish-speaking operator. An example comes to mind: being passed from
one representative to another with laughter in the background and then
being disconnected or getting no live operator.

Hispanic customers report that they experience prejudice and perceive
they are treated as second-class citizens because of their nationality
or origin, their Spanish surname or a language barrier. Hispanics are
the fastest-growing minority in the United States, and the majority have
acclimated into American society. Nevertheless, the stereotypes persist.
The discrimination can be blatant, it can be subtle, unspoken, but it
exists. It is a common misconception that lack of fluency in English
makes one illiterate or indigent or even an assumption that we\'re here
illegally or are immigrants, even though some of us were born here.

Why do I mention this? Because it happens and I hear it every day from
customers regarding the treatment they receive. Very well, you might
ask, why don\'t they learn to speak English? Ladies and gentlemen, I do
speak English, but \-- and a lot of your other customers do, also. But
those of us that are not so privileged to have access to an interpreter,
all we want is to be treated with dignity. We are not asking for
handouts. We\'re paying for the services, so we have the right to some
respect. All we want is fair treatment.

As a Mexican-American, I have personally experienced the treatment I
referred to above, when I was transferred to Gettysburg, Pennsylvania,
by the FCC four years ago from Texas. I attempted to establish new
telephone service. I contacted the local carrier and proceeded to give
my order. The telephone company representative asked my name and upon
hearing my surname, asked, are you Spanish or do you speak Spanish? I
replied, yes, whereupon, without warning, I was transferred into \"la la
land\" and I was put on hold for almost an hour. I had to return to work
so I disconnected.

I called back later from my office and spoke to a supervisor and said, I
work for the FCC and all I wanted was to establish a new account and why
should my call be set aside because of my Spanish surname? She
apologized profusely and proceeded to take my order. I was lucky. I had
to resort to name dropping in order to get better service. But what
about those customers who don\'t have that privilege? Why should they be
treated differently because of their national origin? This is equivalent
to racial profiling whereby, in a lot of areas, minority motorists are
stopped by police and singled out because of their appearance. Except in
this instance, it\'s an accent or a Spanish surname or a language
barrier.

It is my suggestion that it would be extremely helpful if each telephone
company would establish a Spanish liaison to reference instances of
discrimination and to better represent Hispanics. I would also add that
it would be a smart merchandising move for service providers to
accommodate the Spanish population. They\'re a huge majority, work hard,
are family oriented and have an excellent earning capacity. So it\'s
beneficial economically for companies that provide goods and services to
tap into that market and to provide good customer service to Hispanics.

I also hope that by appearing here today, we can open the lines of
communications and that we have a better understanding of the roadblocks
encountered by Hispanics on a daily basis. Thank you.

(Applause.)

MS. PELTZ-STRAUSS: Thank you so much, distinguished panel, for all of
your excellent presentations. My child has a book called *Frog and
Toad*, and in one of the stories in *Frog and Toad*, the frog \-- I
can\'t remember whether it\'s frog or toad, but one of them is telling
the other about a dream that he had, where he\'s standing on stage and
he\'s one size and he\'s shrinking and getting gradually smaller and
smaller and smaller.

I called customer service not that long ago \-- actually, this was to
ask questions about my computer modem connection \-- and the customer
representative barked commands at me, obviously aware that I was not
highly technical. And by the end of that phone call, despite the fact
that I consider myself a somewhat confident person, I had gotten smaller
and smaller and smaller. And it\'s a terrible feeling when a customer
service agent does that to you.

Again, thank you very much and now I think we\'re going to move directly
into the next panel, which will be presented by Lorraine Miller.

MS. MILLER: Hasn\'t this been informative? I think this is one of the
good things about doing these forums, is not only do we learn from each
other, but it helps us kind of really focus on where we need to go with
this. And today, I think this is the perfect segue into the part of our
forum today that really comes to the crux of what we hope to do. What is
good customer service?

And today we have what I consider an expert. This guy is the real John
Goodman and he\'ll explain that to you. John is the president of
e-Satisfy, and e-Satisfy is a customer relationship management company
that measures the customer experience for click-and-mortar companies.

Before this position, he was the founder and president of TARP as well
as an advisor to Customer Insights. This is interesting. Since 1972, he
has managed over 1,000 separate customer service studies and assessed
the customer service- and complaint-handling systems of over 800
corporations and government agencies. Listen to his client list \-- 3M,
Xerox, Toyota, Lexus, American Express, Citibank, AT&T and MCI. Now
he\'s a real, a real credible and educated man. John graduated from
Carnegie-Mellon University with a B.S. in chemical engineering and
received an M.B.A. from the Harvard Graduate School of Business
Administration.

John A. Goodman. Thank you, John, for joining us.

(Applause.)

MR. GOODMAN: And hopefully we\'re going to \--

MS. MILLER: Did everybody pick up the packet that John had outside
there? Okay.

MR. GOODMAN: Okay, are we up on the screen? Great. While Gloria said she
wasn\'t going to point fingers or name names, I am going to point a
finger, because, in fact, there really is one person who really is the
cause of all the poor service that we\'ve been hearing about all this
morning, and that is the chief financial officer of those corporations.
And what I\'m going to suggest is that you can convince the CFO that, in
fact, good service is good business. You just have to have the right
kind of information.

Now, if I\'m not totally at the end of my rope on this, I am going to
hopefully bring this up here. And it didn\'t shut down or do anything
bad to me. What I\'d like to cover in the next 20 minutes is first of
all, very quickly, what\'s in e-Satisfy, and then talk about the causes
of customer dissatisfaction \-- what are the key attributes \-- and
then, how can you actually explain service to the chief financial
officer. And I\'m going to give you an example derived from a wireless
company.

Now, in terms of e-Satisfy, we started out as an ad hoc student group at
Harvard 30 years ago and have yet to get real jobs. And one of our
claims to fame is that we\'ve done two studies sponsored by the White
House Office of Consumer Affairs, looking at customer service and
complaint handling. We\'ve even done satisfaction surveys for the
Central Intelligence Agency.

Now, contrary to popular belief, Saddam Hussein was not a customer, he
was a recipient of their services and he also didn\'t return his
questionnaire.

(Laughter.)

MR. GOODMAN: Our basic approach to customer service is rather
straightforward. Ideally, you want to do the job right the first time,
but this is where companies get into trouble, because they define
quality as, we delivered the product according to spec. The problem with
that is the customer may not have the same set of expectations, and
I\'ll come back and talk about that.

The second half of the equation is, you have to have an effective
contact management system, but we find most corporations will have
hundreds of people answering the phone, but no one saying, why are we
getting all these calls? To the degree that you have that allocation of
resources, you have doomed yourself to forever being in a fire-fighting
mode. Does this look at all familiar?

In fact, our suggestion is \-- and again, we think Toyota and Lexus have
a good operation. They have \-- for every 25 people on the phones
answering questions, they have one full-time person saying, why are we
getting all these calls? How many people does your company have?

Now, what are the causes of customer dissatisfaction? We find that most
corporations assume that if a customer is dissatisfied, obviously some
employee has fouled up and if we can identify who that person is and
have a public hanging, life will then be beautiful. Our suggestion is
that only about 20 percent of dissatisfaction is caused by the actions
of individual employees. Forty percent is caused by the company
delivering products or services that have unpleasant surprises built
into them or, God forbid, marketing overpromises.

I have a Dilbert cartoon that I didn\'t bring with me, where Dilbert is
told, go work with marketing, and the marketing guy says, now, I know
this looks like criminal fraud, but it\'s not, it\'s marketing. And that
is a serious issue. And in fact, we\'ve developed \-- we have a working
paper we\'d be happy to send you a copy of, that talks about an index of
marketing quality, which basically says, how much of the expense on the
back end in service is due to marketing not setting proper expectations
upfront?

Now, the last 40 percent of dissatisfaction is caused by the consumer.
Consumers do rather strange things. One of our clients is a liquid
bleach manufacturer and they get not a complaint but a suggestion once a
month, why don\'t you make your bleach taste better? The specific
suggestion is cherry flavor. People brush their teeth with it and it
does whiten your teeth. It also whitens your esophagus and I don\'t know
what it does for your breath. But it\'s sodium hydrochloride, it won\'t
kill you.

Now, most corporations say, hey, look, if the customer is an idiot,
it\'s not our problem. Well, it is, because you have to clean up the
mess. And so our suggestion is that if you educate the customer on how
to stay out of trouble, it becomes a win-win. Now, most corporations
say, customer education is a goody-two-shoes, nice waste of time. Au
contraire.

This is data from Mannington Floors, and one of the things Mannington
found was that no one ever reads the care directions for their no-wax
floor. So the first thing you do is you take Ajax, an abrasive, clean
the floor and you have now ruined the surface.

So what we did was we worked with them to get the care instructions into
the hands of the consumer, and the dealer actually opened the page and
pointed out two or three things to them. Not a big deal, but \-- you
know, 30 to 60 seconds of time. We took 2,000 people who had been
educated versus 2,000 who hadn\'t, went back to all of them, and what we
found was that those who had received the education were 10 to 30 points
more satisfied. And if you look at the top box, people who said, I
definitely would buy this again, you had a 25-point increase. So a
little bit of education can have a 25-point impact on customer loyalty.
And most phone companies are desperately working to raise their
satisfaction and loyalty index one or two points. Customer education can
deliver as much as 25 points.

We also found that problem experience was half as great, which means
you\'re getting a lot less phone calls. And if they did have a problem,
you had a higher complaint rate to the company and a higher level of
satisfaction.

Now, in terms of setting appropriate expectations, the best time to do
it is at the point of sale. But if you don\'t do it then, one approach
we have seen which a number of companies have used \-- Vodaphone is one
good example. One of my senior staff, Jeff Maisel (phonetic) who is
here, has worked with Vodaphone in Europe. Vodaphone makes a welcome
call that says, hi, we\'re happy that we\'ve activated you. Let me
explain how to use everything, and by the way, here\'s what your bill is
going to look like.

Or you can have an interim follow-up call after the customer has had
three or four weeks of service where, okay, you\'re about to get your
first bill, here\'s what it\'s going to look like, and by the way,
here\'s how to use your call-waiting and your voice-mail system that
you\'re just still trying to fight with. We find that a preemptive
educational strike is one of the cheapest ways of enhancing quality.

The worst time is when the unpleasant surprise has taken place and
service is needed. Now that rep is going to have to try and say, well,
yeah, you didn\'t quite pick up on that charge but here it is. But at
that point, you\'re already looking like a bunch of crooks.

This is an example of setting proper expectations. We\'ve decided to
hang loose this vacation and go wherever the airline sends our luggage.
United Airlines is now trying to implement this policy.

(Laughter.)

MR. GOODMAN: Now, what are the causes of regulatory complaints? The
customer feels like he\'s been stuck with an unpleasant surprise, and
hey, you know, you\'re stuck, you\'ve got to pay the bill. That\'s when
they escalate. Nonresponse causes escalation. Rudeness causes
escalation. The thing I find mind boggling is, in many cases, your own
employees are referring customers to the regulators. This is crazy. But
what happens is that the front-line employee doesn\'t feel they can
defend themselves and they say, well, you know, hey, I am mad at my
company for putting me in this position, so the hell with the company,
I\'m going to refer them to the regulator. And so your employees are
sandbagging you when they do this, but it does happen very often.

Or no channel is provided, at which point they will go to Call to Action
or whomever and then you \-- they get referred to the regulator.

And finally, failure to acknowledge a problem. One of the things that we
have seen with, especially, cellular companies is, you have dead spots
and areas where you have static. Our suggestion has been, publish a map
of the dead spots and basically say, don\'t start a new, important call
as you go into that valley. That will save you a lot of time and money
as opposed to having the customer call up and complain.

What we have seen in many cases \-- and I\'ve actually monitored these
calls \-- a consumer calls up and says, I just had a dropped call. The
rep says, oh, I\'m really sorry that happened. I\'ll give you credit for
the call and I\'ll report it. The implication is, something is going to
get fixed. It\'s not going to get fixed. So the sixth and seventh and
eighth time the person calls, now they don\'t believe you, but by the
way, you\'ve also incurred the expense of those eight calls.

Wouldn\'t it be simpler to say, here\'s a map of our dead spots and
don\'t call when you\'re in those areas? Now, in fact, Jeff has worked
with Vodaphone, and Vodaphone actually does provide maps of their dead
spaces in Europe. We have yet to get a U.S. telephone company who is
willing to do that, because the marketing people say, oh, God, if we
admit we have dead spots, we might not get the sale. Everybody has dead
spots and they\'re going to find out as an unpleasant surprise and it\'s
going to cost you a lot more money.

Now, what is good service? Basically six functions, and I\'m going to
whiz through these rather quickly. You need to solicit complaints, which
I know, from your perspective, sounds nuts. You have to get people to
the right place. You have to log the contact. You have to have the right
kind of response. You have to do analysis and reporting for prevention
purposes and then you have to actually evaluate.

Now contact solicitation is basically telling the customer, we really do
want to hear from you, and that message has to be in front of the
customer exactly when he needs it. Having it on page 23 of the user\'s
guide is useless, because no one ever gets beyond the inside front cover
or the outside back cover.

Now, screening is getting people to the right place on the first
contact. You need to be available at the appropriate hours. Voice mail
does 17 percent damage to customer satisfaction and loyalty, if you hit
a voice-mail system. The next one, which everyone has already referred
to, is the automated response system. And Tom Peters did a great
interview with me a few years ago. He titled it, \"Push one, push two,
push three, push your customer over the edge,\" and that\'s what you
tend to do.

Now, people have complained vociferously about automated systems. There
is a silver bullet. If, wherever you print the phone number, you print
the menu, then the customer doesn\'t have to listen to the 17 options.
They know, okay, I\'m going to have to push one and push three. This
also dramatically cuts your line charges, because you don\'t have people
listening to all this stuff. This is an example. Western Digital, the
hard-drive company \-- this is printed on their inside front cover of
the manual, so I know I\'m going to call this number and then I want to
push three, then I want to push two. And it makes it much more
efficient, and at the same time, customers don\'t have to encounter this
massive automated system.

Logging is creating a record of the call. Now if it\'s a serious
complaint, most of your companies will create a record of the call. The
problem is, we find that 30 to 40 percent of all the calls to a phone
company are what I call dumb questions and trivia, and in many cases
they\'re answered relatively quickly, but you\'ve still incurred the
dollar or the dollar and a half to handle the call. But they aren\'t
logged simply because it would take me longer to fill out the screen
than to answer the question.

The next problem \-- and I\'ll come back to that in a minute \-- the
next problem we\'ve seen is that in most telephone companies, you log
why Mrs. Jones called, but you don\'t log the general cause. Was it that
she didn\'t understand that this issue was an unpleasant surprise, she
was quasi-incompetent or we actually made a mistake? If you don\'t log
the general cause, there is no way you can ever do any analysis of how
can we prevent this call.

And what we find is, very few organizations log both reason for call and
cause of call. Your reps, in most cases, can diagnose at least generally
what the general cause of the call was. Example: You get a notification
from your auto insurance company that they\'re canceling your insurance.
You call up all upset, what\'s going on? Well, ma\'am, you didn\'t pay
your premium notice. What do you mean? I never got a premium notice. We
sent it to 123 Main Street. Wait, I live at 127 Main Street. So the
reason for call is cancellation and error, though most insurance
companies would simply put \"Billing inquiry,\" and then the general
cause is bad address. Now where did that bad address come from? Do we
have a keying error or do we have an application that forces you to
scrunch your handwriting so we\'re systematically generating bad
addresses?

The point is that the general reason for call, you canceled me, and the
basis cause, bad address, are two conceptually different kinds of data.
And if you don\'t log both of them, you\'re screwed, you can\'t do any
analysis.

Now, as I also said earlier, you need to log the dumb questions and
trivia, but most of your systems do not allow the rep to just put in, I
just got this kind of a standard call and here\'s the general cause in
less than 10 keystrokes so they can then move on. So what most
organizations simply do is, you don\'t log that stuff. You also don\'t
log misdirected calls. And we ran a phone company call center in Silver
Spring not too long ago and 20 percent of all the calls were misdirected
due to confusing advertising programs, and they were spending all the
money redirecting those and never realized that their misdirect volume
was that high, because nobody was doing any logging.

Now, response investigation is, you need to have \-- your front-line rep
needs to have all the information to be able to answer the call on first
contact, because that is the key litmus test you should put against your
service system. What percentage of issues can get handled on first
contact? You have to have all the necessary information. They have to be
able to get it in two to four seconds, and if your front-line reps
can\'t get it, they have to have internal service agreements with the
rest of the organization to be given that information quickly. Your
front-line customer service units should have the power to write a
performance appraisal of everyone who has to give them information.

Now, the next problem that drives people crazy is that in many cases,
consumers are given unpleasant information by your front-line staff. And
in many cases, when the customer is unhappy, they\'ll say, well, why
can\'t you do this? Why do you have this policy? And if your reps can\'t
defend it, they do one of two things. They either say, look, lady, I
don\'t make the rules, I just enforce them, that\'s company policy,
which comes across as rudeness, except in New York. (Laughter.) Or \--
our data shows that New Yorkers complain 3.4 times as much as the
national average, while people in Portland and Seattle are sound asleep.
We think it has to do with the rain and the mold.

But in any case, it\'s either look, Mac, it\'s company policy. Or worse
yet, they\'ll deflect the customer\'s anger by siding with them and say,
yeah, that is a stupid policy, I don\'t know why we do it that way, I
work for a stupid company \-- neither of which does much for corporate
image.

So what you need to do is provide them with what we call response rules.
Here\'s the short answer, but if the customer says, why? \-- here\'s the
clear, believable rationale for why we do what we do. And what we have
found is, your customers will accept a clear, believable rationale, even
if it\'s bad news. A good example is, if the airline pilot gets on and
says, we have a one-hour delay due to a mechanical, your reaction is,
they\'re a bunch of foul-ups. If, on the other hand, he says we have a
leak in the hydraulic pump, your reaction is, hey, I want a good
hydraulic system. Take an extra half hour if necessary. He makes you
thankful to be sitting on the ground.

We joke about, at Toyota, that when you\'re saying no to the customer or
giving him bad news, the object of the game is to tell the customer to
go to hell in such a way that he looks forward to the trip.

(Laughter.)

MR. GOODMAN: So your front line has to have response rules that allow
them to do that and to deal with challenges. In the auto industry, a
standard query is, do you have a defect in this part of the car?
Standard answer, courtesy of lawyers, is, we\'re not aware of any
defects \-- because if we were, we\'d have to have a recall. Then the
zinger comes back, well then, why did the dealer tell me he\'s repaired
29 of these this week? And that\'s when reps get rude, is when they\'re
backed into a corner and can\'t defend themselves. And so you need to
provide them with, here are the challenges you\'re going to get hit
with. And by the way, here\'s how you can respond to those challenges.
This is an example of a not-so-good response rule: We\'ve lost your
stuff, but you get first choice of any bag off Flight 601.

Okay, response production is, the computer should do the follow-through.
We\'ve heard about broken promises about 30 times today. That is because
some person has to fill out a piece of paper, pass it to someone else,
and hope they do something with it. To the degree that your computer,
when I put into the computer that this needs to be done, the computer
automatically executes.

This is why, at American Express, the rep will say, okay, I\'ve taken
this charge off your bill, it has been done, and they speak with
absolute reassurance. The reason is that the computer has already taken
care of it. In many cases, and I realize these are legacy systems, the
phone companies don\'t have that seamless linkage.

Now, in terms of evaluation, you need to evaluate your individuals and
your service organization in terms of satisfaction and repurchase. And
we find in most cases, it\'s only productivity. What percentage are
being handled on first contact and are you getting good information to
prevent future occurrences? These top two areas, where I\'ve allocated
two-thirds of where evaluation should be taking place, are almost
nonexistent in most corporations.

Now, how you evaluate satisfaction surveys in conjunction with
call-quality monitoring is critical, but we put more emphasis on the
satisfaction survey because, in many cases, the clear, believable
explanation is what\'s going to lead to customer satisfaction. Now, when
I\'m a front-line rep and I give you the corporate policy, the
supervisor who is monitoring that call says, oh, yeah, that\'s clear,
that makes good sense to me. Well, the supervisor wrote the policy.
Certainly it\'s clear to them. It is not clear to Mrs. Jones in Des
Moines.

Also, the other problem we\'ve seen is that people use satisfaction
surveys to evaluate individual representatives or service units. The
most important analysis should be, what kinds of issues are we
systematically not making people happy? So the analysis should be by
type of problem, by type of product or type of client, not just is Mary
Jo giving better service than Sam?

This is an example of what we\'re now finding for Web surveying. More
and more, the Web is a way of communicating and we\'re finding that if
you have a pop-up survey like this and you can ask 10 questions in less
than a minute, you can get very high response rates very, very quickly
and you get almost instantaneous feedback. We do believe you have to
modify your survey to your clientele. This is from a bar and grill in
Emporia, Kansas, and an example of the modification is, if you look at
the top category under service, it says, \"Unbelievable, I want to marry
this person,\" versus the bottom category is, \"Slower than wet blank
sliding down a dry rock.\" We think this is an interesting way of
modifying your survey to fit your clientele. It has some other
categories you can read at a later time.

In any case, the last function is analysis and reporting, and what we
find is, in most telephone companies the customer service reports have
very little impact. And this is four questions that you can ask to see
if it has impact. Ask the head of marketing or the head of operations,
did you receive last month\'s report or use this with complaint reports
for those of you who generate them. Did you read it? The euphemism
you\'ll get is, I scanned it. Did you find anything useful? Oh, yeah,
good report. What action did you take? If they took no action, you\'re
wasting your time, their time and a lot of trees.

So the analysis has to be tailored to the individual audience. We find
most complaint reports are written in a tattletale mode of, who screwed
up this month. And so, basically, it has to be done in a consulting
mode, and the first thing you learn as a consultant is, don\'t embarrass
your client. They have to be timely and then, rather than saying, last
month we got 132,000 complaints, better to say, here are the three key
kinds of complaints. Here\'s the problem, here\'s how many customers
were affected, here\'s the damage to loyalty, here\'s the cause and
here\'s the proposed action.

Now, how do you convince the CFO? I\'m not going to go through all the
gory details of this, but you can follow through it. We also have an
article entitled, \"Selling Service and Quality to the CFO.\" Just give
us a business card and we\'ll send it to you.

But basically, here we had a wireless company with 600,000 customers.
Eighty percent had had problems. Of those, only 50 percent complained,
and of those who complained, we had about 85 percent satisfied. What we
were able to calculate is, out of those 600,000 customers, because of
problems and how they weren\'t being handled, they were losing a net of
117,000 customers. Now, admittedly, 22,000 of these customers were
people that they really were just as happy to be rid of, but in
addition, they were losing another 8,000 customers due to negative word
of mouth. Now, what each of you in your company should do is figure out,
what does your baseline look like.

We then did a calculation of \-- okay, everybody says customer service
is a cost center. What if customer service was eliminated and either
people didn\'t complain or they would go back to their Radio Shack store
where they bought the service? What we found was, you would lose even
more customers, and in this particular case, it would cost you another
\$10 million because you didn\'t give service. So in fact, it was a net
loss of revenue if you eliminated the customer service department.

Now another approach is, gee, let\'s get more people to complain and
let\'s satisfy more of them. And what you find is that you, in fact, get
incremental profit of \$17 million if you get more people to complain.
This goes back to the basic finding, complaints are good, because
complaints are the customer giving you an opportunity to retain his
loyalty.

One other approach is, what if we just educated customers on how to use
the cell phone or the telephone system more effectively so that they
don\'t have as many problems? If we reduce problem experience from 80
percent to 60 percent, this company would save 15,000 customers and make
about \$11 million more in profit. So if you could do the customer
education for \$5 million, you would get over a 200 percent return on
every dollar invested.

So we have found these kinds of analysis are acceptable to the chief
financial officer, and that really is the key person that you need to
convince if you\'re going to see an improvement of service. And I would
also suggest that even the regulators need to, rather than talking to
the government relations people, need to go talk to the CFOs, because
they\'re the people who are really the major barrier.

So in summary, you need to invest in customer education, do the basics
well to close on first contact, use consistent response rules across all
the different channels so people don\'t start shopping the system,
provide an internal appeals channel to reduce regulatory complaints.
Here is one quick secret we\'ve learned in the power industry and the
airline industry. If the FCC or your state regulator is beating you up
because you have too many complaints, what you should do is put a
high-visibility 800 number where your consumers can call and file a
complaint with an internal corporate appeals board.

The minute you do that, I guarantee your regulatory complaints will drop
by 40 percent. We\'ve done this with power utilities and airlines. The
airline that is top on the DOT complaint list in terms of, they have the
lowest number of complaints, I don\'t think gives necessarily better
service. But they do have 800 numbers posted in Newark Airport and if
they cancel a flight, they give everybody a comment card. Now if you
have five minutes of anger, where do you spend it? Filling out the
comment card, as opposed to finding the DOT complaint number.

So what we have seen is the number of complaints go down dramatically.
The regulators say, gee, we\'ve succeeded in creating better service
when, in fact, probably not a lot has changed, but at least you\'re
handling your own complaints.

And then, finally, show the CFO the cost of poor service and you\'ll get
what you need. Thank you very much for your time.

(Applause.)

MR. GOLDBLATT: That was great. One thing John didn\'t mention that we
learned at the FCC is that people\'s impression of the FCC is not
necessarily the Chairman or the Commissioner\'s, but the person they
speak to on the phone when they call up our call centers. And I remember
John did a study a long time ago about how many people repeat a bad
experience versus how many people repeat a good experience. And what is
it, it\'s, like, multifold?

MR. GOODMAN: What we find is \-- through word of mouth \-- is, twice as
many people hear about a bad experience as a good experience, but what
we have found on the Web is that four times as many people will go to a
chat room and post bad things about you as the number of people who go
to a chat room or bulletin board and say nice things about you. So the
word of \"mouse\" is four times as much.

MR. GOLDBLATT: So remember, I guess, complaints are good, they really
are. I guess the next segment we have is, if anyone wants to come to the
open mike and \-- be it either consumer or a carrier or anybody \-- and
make any comments? Yes, we have a lady. If you just could identify
yourself, I\'d appreciate it. Thanks.

MS. WOOD: My name is Gwendolyn Wood and I would like to know how many of
the carriers are contracting out customer relation services to other
companies and how are they handling that?

MR. GOLDBLATT: That\'s a good question. Is there anybody here from a
carrier who would like to respond? We find that is a very good question
and a lot of times \-- we\'re finding that a lot of the complaints that
we get is because the main company doesn\'t really know what\'s being
said at some contracted center somewhere all around the country, or a
center maybe in Iowa has no idea what\'s going on in Manhattan and
cannot really relate to the problem. That was a good question, excellent
question. Yes?

UNIDENTIFIED SPEAKER: While he\'s coming to the mike, I\'ll just add to
that. The problem that I mentioned earlier this morning with one of our
major companies not being responsive to consumers was caused largely
because when something came in \-- when we called them, we got their
regulatory side. We did not get their consumer affairs side, and the
regulatory side was not empowered to solve the consumer\'s problem.

So there was an automatic gap. They felt they were giving us better
service, but actually it was worse service for us and worse for the
customer. And when they got rid of that at our insistence, all of a
sudden, the problems went away.

MR. REAL: My name is Jim Real (phonetic). A question concerning notice
in changes of rates and changes in long-distance plans. I\'ll use myself
as the anecdote. I was on a long-distance plan where I was paying 10
cents a minute. When I received my monthly bill, the rate was 12 cents a
minute. When I called to inquire about that, they said the rate had
increased. I said, well, I wasn\'t notified about that. They said, we
ran ads in major media and that we\'re not required to tell you
directly, and oh, by the way, your plan was discontinued two weeks ago,
which was also without any kind of notification. There really can\'t be
any good customer service story in anything like that, but the obvious
question that I asked was, well, aren\'t you required to notify your
customers of rate increases \-- and I meant, directly notify your
customers. And the response was, no, we are not required to notify our
customers directly, only by putting a notice in some type of major
media.

So obviously the question is, is that correct and the question to the
carriers is, how can this be good customer service?

MR. GOLDBLATT: Actually for the answer, I\'d ask one of our specialists.
Tom?

MR. SHIRLEY: Yes, sir, that is correct. That\'s Part 42, I think \--

MR. GOLDBLATT: The microphone, so people can hear you.

MR. SHIRLEY: That is correct, that the requirement is only that the
carrier place an ad in a newspaper, just what you said. It\'s Part 42 of
FCC rules, if my memory serves, it\'s 42.6, and it says just about what
you just said. I wish it were better. I think it would be better for the
carriers to notify their customers in their bills. They may, there\'s no
prohibition of the carriers notifying their customers more personally
than notification in the newspaper.

We wondered why that was, that it was only required that they place an
ad in a newspaper, and we came away with the answer, well, probably
because it\'s cheaper. You know, a fraction of a cent, printing each
bill is going to be a lot of money for the carrier.

MR. REAL: I can understand the monetary aspect of it, but then three
days later, I got an advertisement from the same long-distance company,
filled with glossy printed ads to sign up for cellular service, which no
doubt cost many more cents than a single line at the top of my bill
which would have said \-- they wouldn\'t have had to put an extra insert
in, but just a single line on my bill that said, \"Your plan has been
discontinued and the rates have been increased,\" and not requiring a
separate piece of paper. But it seems a few extra words on a bill
wouldn\'t be that expensive.

MS. PELTZ-STRAUSS: There is a new proceeding at the FCC on detariffing
of long-distance telephone companies, and one of the outgrowths of that
proceeding is that there will be direct contracts with consumers for
telephone service. And I believe \-- this is new to us, as well, but I
believe that there is going to be some provision for direct contracts
with consumers. And as part of that, notification requirements for
changes in rates would seem pretty basic.

So we\'re going to follow up on this, the Consumer Information Bureau
will follow up on this, and try to ensure on behalf of consumers that
there is future notification as this rulemaking proceeds.

MR. GOLDBLATT: I think also what you\'re saying is just common sense,
good marketing. Why should there be regulations? Why doesn\'t the
company just think of it on their own, for goodwill?

Yes?

AUDIENCE MEMBER: On top of everything else, I \-- and didn\'t find out
about it until three months later, because the company had \-- . So I
think many see the \-- the same plan and they find themselves switched
to mechanical calling rates and find out about it three months later.

MR. GOLDBLATT: As we find here, just within our new bureau, consumer
education is really important and has a great payoff. It really does.

Anybody else have any questions? Lorraine, do you want to \-- oh, go
ahead.

MS. STEWART: This is Pam Stewart. Just to make a comment on what Karen
said, I think that\'s great that they\'re looking into something like
that, but if I\'m having a hard time understanding my bill, if I\'m
going to have to understand a contract that I make for services with the
phone, I can\'t even begin to imagine that.

MR. GOLDBLATT: Excellent point. Yes, Nancy?

MS. BROCKWAY: We seem to be sort of doing an informal notice on the
rulemaking right now. Led me add to that \-- I would second that. We\'ve
seen in the gas restructuring industry, for example, in New York, that
big billboards for one of the major companies would say, 100 percent
complaint handling or something like that, indicating that they had a
very strong practice of mediating with the consumers about their
complaints. If you got the contract in the mail, which was several pages
long, single spaced, buried in it. it said, all complaints will be
referred to the American Arbitration Association under their rules, and
in the meanwhile, you have to pay your bill.

So there are a lot of potentials for abuses in these form contracts.

MR. GOLDBLATT: Thank you. Any other comments? Oh, yes, sir?

MR. CRAWFORD: Well, I\'ve already talked enough, but I just want to
exhort people, when you go back to your companies, you have to examine
whether or not you, individually, have any real say in what happens
tomorrow at your company. And depending on the answer to that, you need
to connect with the people who do. Or if you have the power to do it, I
think there\'s a real need to come out of this conference with a message
back to the company that the water is hot and getting hotter, and unless
the company wants to end up in an unpleasant stew, it really has to make
a change in its strategy. I mean, that\'s the whole bottom line to all
of this. If somebody won\'t say it, well, the hell with it, I will.
Thanks.

(Applause.)

MS. PELTZ-STRAUSS: Lorraine has tasked me with doing the closing
comments. First of all, I want to thank Roger Goldblatt and Janice Wise
and everyone from the Consumer Education Office that put on this
excellent forum.

(Applause.)

MS. PELTZ-STRAUSS: As with our earlier forum on billing, this is only
the beginning, and many of the concerns that were raised here were
extraordinarily helpful. This is why we now have a Consumer Information
Bureau. We will take your suggestions, we will listen to them carefully
and we will move on them. We will act upon them. When the detariffing
proceeding comes along, we will respond. We may respond earlier than
that. We just want you to know that we\'ve listened very carefully, we
thank all of the panelists. We will be addressing some of these issues
in our own Customer Service Center. I also want to thank all of the
CAMs, the Consumer Advocacy and Mediation specialists (applause) as well
as Sharon Bowers and Martha Conti and Tom Shirley for helping to
organize their participation.

(Applause.)

MS. PELTZ-STRAUSS: And again, please feel free to contact us whenever
you\'d like to. We\'ve learned a tremendous amount here. We hope that
the telephone companies that participated today learned a tremendous
amount. And now we want to issue a challenge. And the challenge is that
the telephone companies improve their customer service by a certain
date, actually. You have three months to start changing your customer
service patterns and policies to meet the various recommendations that
were presented today. After that three-month period, in early September,
we are going to conduct, again, a survey of the types of customer
service complaints that come into our consumer centers. It will be a
30-day period that we will be looking at the types of complaints that
come in.

We propose to release the results of that survey, naming names of
telephone companies, on October 13. So you have a real challenge
presented before you and we are hoping that you will not want to be
number one on the list of the worst customer service companies. Thank
you very much.

(Applause.)

(Whereupon, at 12:16 p.m., the hearing in the above-entitled matter was
adjourned.)

//

//

**[REPORTER\'S CERTIFICATE]{.underline}**

**FCC DOCKET NO.**: N/A

**CASE TITLE**: Telephone Customer Service Forum

**HEARING DATE**: June 9, 2000

**LOCATION**: Washington, D.C.

I hereby certify that the proceedings and evidence are contained fully
and accurately on the tapes and notes reported by me at the hearing in
the above case before the Federal Communications Commission.

Date: June 9, 2000
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Gabriel Thomas

Official Reporter

Heritage Reporting Corporation

1220 L Street, N.W., Suite 600

Washington, D.C. 20005-4018

**[TRANSCRIBER\'S CERTIFICATE]{.underline}**

I hereby certify that the proceedings and evidence were fully and
accurately transcribed from the tapes and notes provided by the
above-named reporter in the above case before the Federal Communications
Commission.

Date: June 9, 2000
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Diane Duke

Official Transcriber

Heritage Reporting Corporation

**[PROOFREADER\'S CERTIFICATE]{.underline}**

I hereby certify that the transcript of the proceedings and evidence in
the above-referenced case that was held before the Federal
Communications Commission was proofread on the date specified below.

Date: June 9, 2000
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Lorenzo Jones

Official Proofreader

Heritage Reporting Corporation