**Before the**

**FEDERAL COMMUNICATIONS COMMISSION**

**Washington, D.C. 20554**

**\[CORRECTED VERSION\]**

In the Matter of )

)

Truth-in-Billing ) CC Docket No. 98-170

and )

Billing Format )

**FIRST REPORT AND ORDER AND**

**FURTHER NOTICE OF PROPOSED RULEMAKING**

Adopted: April 15, 1999 Released: May 11, 1999

**Comment Date**: 14 days from Federal Register publication for comments
concerning standardized labels for charges relating to federal
regulatory action; 30 days from Federal Register publication for
comments concerning applicability of truth-in-billing principles and
guidelines to Commercial Mobile Radio Service (CMRS) carriers

**Reply Date**: 21 days from Federal Register publication for comments
concerning standardized labels for charges relating to federal
regulatory action; 45 days from Federal Register publication for
comments concerning applicability of truth-in-billing principles and
guidelines to CMRS carriers

By the Commission: Commissioner Ness issuing a statement, Commissioner
Powell concurring and issuing a statement, and Commissioner
Furchtgott-Roth dissenting and issuing a statement.

**Table of Contents**

I. THE IMPORTANCE OF CLEAR AND INFORMATIVE BILLS IN COMPETITIVE
TELECOMMUNICATIONS MARKETS 1

II\. TRUTH-IN-BILLING PRINCIPLES 9

A.Adoption of Guidelines 9

B. Legal Authority 20

C. Specific Truth-In-Billing Guidelines 28

1\. Clear Organization and Highlighting New Service Provider Information
28

2.Full and Non-Misleading Billed Charges 37

a\. Billing Descriptions 38

b\. \"Deniable\" and \"Non-Deniable\" Charges 44

c\. Descriptions of Charges Resulting From Federal Regulatory Action 49

3.Clear and Conspicuous Disclosure of Inquiry Contacts 65

III\. FURTHER NOTICE OF PROPOSED RULEMAKING 68

A. Discussion 68

1\. Application of Rules to CMRS Carriers 68

2\. Standard Labels for Line-Item Charges 71

IV\. PROCEDURAL MATTERS 72

A. Final Regulatory Flexibility Analysis 72

1.Need for and Objectives of this Order and the Rules Adopted Herein 73

2.Summary of the Significant Issues Raised by the Public Comments in
Response to the IRFA 74

3.Description and Estimates of the Number of Small Entities to Which the
Rules Adopted in the Order in CC Docket No. 98-170 May Apply 78

4.Summary of Projected Reporting, Recordkeeping and other Compliance
Requirements 101

5.Steps Taken to Minimize the Significant Economic Impact of This Order
on Small Entities and Small Incumbent LECs, Including the Significant
Alternatives Considered 102

B. Final Paperwork Reduction Act of 1995 Analysis 104

C. Initial Regulatory Flexibility Analysis for Policies Proposed in the
Further Notice 105

D. Initial Paperwork Reduction Act of 1995 Analysis for the Further
Notice 112

E. Comment Filing Procedure 113

F. Further Information 117

V. ORDERING CLAUSES 119

APPENDIX A Final Rules

APPENDIX B List of Commenters

**I. THE IMPORTANCE OF CLEAR AND INFORMATIVE BILLS IN COMPETITIVE
TELECOMMUNICATIONS MARKETS**

In this Order, we undertake common-sense steps to ensure that consumers
are provided with basic information they need to make informed choices
in a competitive telecommunications marketplace, while at the same time
protecting themselves from unscrupulous competitors. We believe that the
\"truth-in-billing\" principles adopted herein will significantly
further consumers\' opportunity to reap fully the benefits envisioned by
the Telecommunications Act of 1996 (1996 Act), which amended the
Communications Act of 1934 (Act).[^1]

By the 1996 Act, Congress intended to facilitate the introduction by
private firms of new consumer services, service providers and
technologies by promoting the development of competition and
deregulation in all telecommunications markets.[^2] The Act instructs
the Commission and state public utility commissions to open
telecommunications markets to competition and to reform universal
service support mechanisms to ensure their consistency with competitive
markets. The proper functioning of competitive markets, however, is
predicated on consumers having access to accurate, meaningful
information in a format that they can understand. Unless consumers are
adequately informed about the service choices available to them and are
able to differentiate among those choices, they are unlikely to be able
fully to take advantage of the benefits of competitive forces.

Unfortunately, as a by-product of these changes, we also have seen
growing consumer confusion concerning the provision of these services
and an increase in the number of entities willing to take advantage of
this confusion.[^3] The most glaring manifestations of consumer
confusion may be the dramatic growth in the number of slamming and
cramming complaints received by the Commission and the states.[^4] As we
explained in the *Notice of Proposed Rulemaking* (*Notice*) in this
proceeding,[^5] our review of the complaints received by this Commission
plainly demonstrates that the difficulty consumers experience in trying
to understand their bills for telecommunications service has been a
significant, contributing factor in the growth of these fraudulent
activities. The comments in this proceeding reinforce this
conclusion.[^6] Beyond these frauds, however, we have seen a substantial
rise in the number of complaints generally arising out of consumers\'
confusion concerning charges on their telephone bills.[^7] Since, for
most consumers, the monthly telephone bill is their primary source of
information and point of contact with respect to their
telecommunications services providers, these complaints are strong
evidence that consumers are not getting necessary information in a
format that allows them to make informed choices in this market.[^8]
Indeed, it is apparent from our review of consumer complaints that,
while the nature and variety of the services charged on consumers\'
telephone bills have changed dramatically in recent years, the format of
the bills themselves have remained largely unchanged since the court
ordered divestiture of the Bell System in 1983.[^9]

Nor are we alone in this concern. Virtually every state and consumer
advocacy group that commented in this proceeding urges us to take action
to address the growing problem of consumer confusion with their
telephone bills.[^10] Similarly, our colleagues at the Federal Trade
Commission assert that intervention on our part is necessary to help
consumers avoid \"falling prey\" to unscrupulous service providers who
hide or mislabel unauthorized charges on consumers\' telephone
bills.[^11] Several members of Congress also have identified consumer
confusion with their telephone bills as a growing concern that should be
addressed by this Commission.[^12]

Accordingly, in this Order, we adopt generally the \"truth-in-billing\"
principles proposed in the *Notice* in order to ensure that consumers
receive thorough, accurate, and understandable bills from their
telecommunications carriers. Specifically, we will require:

First, that consumer telephone bills be clearly organized, clearly
identify the service provider, and highlight any new providers;

Second, that bills contain full and non-misleading descriptions of
charges that appear therein; and,

Third, that bills contain clear and conspicuous disclosure of any
information the consumer may need to make inquiries about, or contest
charges, on the bill.

Additionally, we adopt minimal, basic guidelines that explicate
carriers\' binding obligations pursuant to these broad principles. These
principles and guidelines are designed to prevent the types of consumer
fraud and confusion evidenced in the tens of thousands of complaints we
have received.[^13] Moreover, we believe that they represent fundamental
principles of fairness to consumers and just and reasonable practices by
carriers.[^14]

In taking action today, we recognize that, at this time, competitive
pressures alone do not ensure that consumers receive clear, informative
and consumer-friendly telephone bills from certain carriers. We
acknowledge, for example, that most consumers continue to have both
their local and long distance service billed together by their local
exchange company (and, indeed, consumers have generally expressed a
preference for a single bill), and most consumers do not yet have
significant choice in who they select as a provider of local
service.[^15] We certainly hope that, as competition develops for the
provision of local telephone service, all carriers, including those upon
which we impose requirements here will seek to distinguish their
services by providing clear, informative, and accessible bills to their
customers. Moreover, by implementing these principles through broad,
binding guidelines as described more fully below, we allow carriers
considerable discretion to satisfy their obligations in a manner that
best suits their needs and those of their customers. Thus, carriers that
wish to distinguish themselves through creative and consumer-friendly
billing formats have wide latitude to compete in this manner (*i.e.*, by
producing bills on 8½ x 11 inch paper).[^16]

Even in competitive markets, however, disclosure rules are needed to
protect consumers.[^17] Indeed, our adoption of these truth-in-billing
principles is in large part designed to bring to consumers some of the
protections to which they would be entitled if these services were
billed in the same manner as other credit purchases.[^18] For example,
the Truth in Lending Act (TILA) and implementing rules require credit
card issuers to provide information concerning the amount and date of
each transaction appearing on a bill, the seller\'s name, and the
location where the transaction took place.[^19] These requirements are
intended to \"protect the consumer against inaccurate and unfair billing
and credit card practices.\"[^20] In a similar manner, our principles
and guidelines will protect consumers from misleading and inaccurate
billing practices.

In sum, we take this action in furtherance of the pro-competitive goals
of the 1996 Act and our responsibility to ensure that *all* consumers
have a fair opportunity to share in the benefits of competitive
telecommunications markets. Certainly, in a competitive marketplace,
consumers should investigate the choices available to them and decide
which services best fit their needs. They also have a responsibility to
be vigilant in protecting themselves from perpetrators of fraud. In this
item, we seek to provide consumers with the basic tools they need to
participate meaningfully in a competitive telecommunications
marketplace.

**II. TRUTH-IN-BILLING PRINCIPLES**

**A. Adoption of Guidelines**

Through this Order, we adopt broad, binding principles to promote
truth-in-billing, rather than mandate detailed rules that would rigidly
govern the details or format of carrier billing practices. The majority
of commenters in this proceeding support such a flexible approach.[^21]
We use the terms principles and guidelines in this Order to distinguish
our approach from a more detailed regulatory approach urged by some
commenters. That is, we envision that carriers may satisfy these
obligations in widely divergent manners that best fit their own specific
needs and those of their customers. We incorporate these principles and
guidelines into the Commission\'s rules, because we intend for these
obligations to be enforceable to the same degree as other rules. Thus,
while we provide carriers flexibility in their compliance, we fully
expect them to meet their obligation to provide consumers with the
accurate and meaningful information contemplated by these principles.

Our decision to adopt broad, binding principles, rather than detailed,
comprehensive rules, reflects a recognition that there are typically
many ways to convey important information to consumers in a clear and
accurate manner. For this reason, we disagree with those commenters who
assert that more prescriptive rules are necessary to combat consumer
fraud through the use of misleading telephone bills.[^22] Instead, our
principles provide carriers flexibility in the manner in which they
satisfy their truth-in-billing obligations. Accordingly, this approach
responds to the concerns of many carriers that detailed regulations
could increase their costs,[^23] and that rigid rules might prevent
competing carriers from differentiating themselves on the basis of the
clarity of their bills.[^24]

Conversely, we disagree with commenters who suggest that purely
voluntary guidelines would be sufficient to combat misleading bills that
facilitate slamming and cramming.[^25] The extent of the current problem
shows that voluntary action alone is inadequate for many carriers.
Failure to codify these principles and implementing guidelines might
result in carriers ignoring our requirements, to the detriment of
consumers. Our Order permits carriers to render bills using the format
of their choice, so long as the bills comply with the implementing
guidelines that we adopt today. We consider our principles and
guidelines to be flexible enough that carriers will be able to comply
with them without incurring unnecessary expense. In fact, we note that
many carriers commented that their current practices already comport
with proposals we outlined in the *Notice.*[^26] Although complying with
these principles certainly may require expenditures by some carriers
whose bills currently do not meet these standards, we conclude that such
costs do not outweigh the benefits consumers will reap from better
understanding their service charges. Particularly in light of the
flexibility we provide carriers to satisfy these guidelines, we find
that the comments do not provide any detailed information by which we
could make such a finding.[^27] Accordingly, we conclude that the
approach we adopt today appropriately balances the rights of consumers
and the concerns of carriers, in furtherance of the deregulatory thrust
of the 1996 Act, and we decline to accept the assertions of some rural
and other carriers that compliance will be too costly for such
carriers.[^28]

As we conclude in section II.B., *infra*, the ability of consumers to
read and understand their bills is crucial to their ability to protect
themselves against slamming. We note, however, that some consumers with
disabilities may, due to the nature of their disability, be unable to
read and understand their telephone bills if they do not have the
ability to receive their bills in accessible formats. Persons with
disabilities, therefore, due to barriers in standard billing formats,
may not be able to determine whether their interexchange carrier has
been changed without their authorization. In this Order, we are not
setting forth requirements that carriers provide their bills in
accessible formats for persons with disabilities. We note, however, that
the issue of access to telecommunications service bills will be
addressed in the pending rulemaking underway to implement section 255 of
the Act. Section 255 states that providers of telecommunications
services and manufacturers of telecommunications equipment must make
their services and equipment \"accessible to and usable by\" persons
with disabilities if readily achievable. Billing would appear to be
included in the usability requirements of section 255. We believe that
the section 255 proceeding is a more appropriate place to address the
issue of accessibility to telecommunications service bills. In the
meantime, however, we strongly encourage carriers to provide billing
information in accessible formats for their customers with disabilities
upon request, so that those customers may effectively understand their
bills and protect themselves against unauthorized carrier changes. Of
course, carriers also are expected to comply with any existing state
requirements regarding accessibility of telecommunications services and
related bills.

[Commercial Mobile Radio Service (CMRS) Carriers]{.underline}. We
believe that the broad principles we adopt to promote truth-in-billing
should apply to all telecommunications carriers, both wireline and
wireless. The principles we adopt today represent fundamental statements
of fair and reasonable practices. Like wireline carriers, wireless
carriers also should be fair, clear, and truthful in their billing
practices. Consumers deserve no less.

We therefore reject the threshold arguments that certain classes of
carriers should be wholly exempted from complying with the guidelines
that we announce today solely because competition exists in the markets
in which they operate.[^29] We emphasize that one of the fundamental
goals of our truth-in-billing principles is to provide consumers with
clear, well-organized, and non-misleading information so that they may
be able to reap the advantages of competitive markets. We anticipate
that, as competition evolves and convergence occurs, wireless carriers
will increasingly compete for wireline customers. In a world of bundled
packages and multiple service providers, clear and truthful bills are
paramount.

As we stated above, however, we reject the detailed regulatory approach
urged by some commenters, because we envision that carriers may satisfy
these obligations in widely divergent manners that best fit their own
specific needs and those of their customers. Nonetheless, in the
wireline context, we incorporated these principles and guidelines into
Commission rules for enforcement purposes. We have adopted these rules
after considering an extensive record on both the nature and volume of
customer complaints, as well as substantial information about wireline
billing practices.

The record does not, however, reflect the same high volume of customer
complaints in the CMRS[^30] context, nor does the record indicate that
CMRS billing practices fail to provide consumers with the clear and
non-misleading information they need to make informed choices. If
current CMRS billing practices are clear and non-misleading to
consumers, then it might be appropriate either to forbear from specific
wireline rules or not to apply them in the first instance. Furthermore,
in some instances, the rules we have adopted might simply be
inapplicable in the wireless context. For example, because CMRS carriers
are excluded from equal access obligations,[^31] it appears that CMRS
carriers will seldom need to indicate a new long distance service
provider on the bill.

Despite the fact that some rules may be inapplicable or unnecessary in
the CMRS context, there are two rules that we think are so fundamental
that they should apply to all telecommunications common carriers: (1)
that the name of the service provider associated with each charge be
clearly identified on the bill; and (2) that each bill should
prominently display a telephone number that customers may call
free-of-charge in order to inquire or dispute any charge contained on
the bill. As a practical matter, we believe that most CMRS bills already
contain the name of the service provider and a contact number. Thus,
complying with these obligations should be neither onerous nor costly.
But, in the unlikely event that a CMRS bill does not contain the name of
the service provider or a contact number, we believe that, at a minimum,
consumers expect and should receive this basic information.

We also intend to require CMRS carriers to comply with standardized
labels for charges resulting from Federal regulatory action, if and when
such requirements are adopted. As a practical matter, this rule will not
apply until we issue an order that adopts the standard labels for
federal line-item charges. We expect to apply the same rule to both
wireline and CMRS carriers, however, because we believe that labels
assigned to charges related to federal regulatory action should be
consistent, understandable, and should not confuse or mislead customers.
Uniform labels will also enable customers to compare such charges among
all providers.

Furthermore, notwithstanding our decision at this time not to apply
these several guidelines to CMRS providers, we note that such providers
remain subject to the reasonableness and nondiscrimination requirements
of sections 201 and 202 of the Act, and our decision here in no way
diminishes such obligations as they may relate to the billing practices
of CMRS carriers.[^32]

**B. Legal Authority**

We conclude that it is critical to the effective operation of a
competitive telecommunications marketplace to ensure that telephone
bills provide consumers with the information they need to make informed
telecommunications choices, as well as the tools to protect themselves
against telecommunications-related fraud. As explained in the *Notice*,
the telephone bill is an integral part of the relationship between a
carrier and its customer.[^33] As such, the manner in which charges and
providers are identified on the telephone bill is essential to
consumers\' understanding of the services that have been rendered, the
charges imposed for those services, and the entities that have provided
such services.

Most commenters agree that we possess, at minimum, concurrent
jurisdiction with states to address these problems.[^34] We find that
our authority to enact the truth-in-billing guidelines set forth herein
stems from both section 201(b) and section 258 of the Act.[^35] Section
201(b) requires that all carrier charges, practices, classifications,
and regulations \"for and in connection with\" interstate communications
service be just and reasonable, and gives the Commission jurisdiction to
enact rules to implement that requirement.[^36] Section 258 of the Act
further authorizes the Commission to adopt verification requirements to
deter slamming in *both* the interstate and the intrastate markets. The
Supreme Court has ruled that section 201(b) provides the Commission with
authority to implement all of the provisions of the Act, including those
that apply to intrastate communications.[^37] As explained in detail
below, with the exception of the guideline discussed at section
II(C)(2)(c) of this Order,[^38] which involves standardized labels for
charges relating to federal regulatory action, the truth-in-billing
principles and guidelines adopted herein are justified as slamming
verification requirements pursuant to section 258, and thus can be
applied to both interstate and intrastate services. We therefore reject
arguments by ALTS and other commenters that, as a threshold matter,
authority to regulate local exchange carrier (LEC) billing practices
resides solely with the states.[^39] We recognize, however, that the
standardized label guideline rests exclusively on our authority under
section 201(b) and therefore is limited to interstate services.

Section 258 of the Act provides us with jurisdiction to regulate the
billing practices of interstate, as well as intrastate, carriers to the
extent that our regulations serve as a means of verifying carrier
changes. Section 258(a) of the Act makes it unlawful for any
telecommunications carrier to \"submit or execute a change in a
subscriber\'s selection of a provider of telephone exchange service or
telephone toll service except in accordance with such verification
procedures as the Commission shall prescribe.\"[^40] The Commission has
previously concluded that this provision encompasses both interstate and
intrastate service providers.[^41] The language of section 258 makes
clear that Congress charged the Commission with the responsibility to
promulgate verification rules to prevent slamming in both the interstate
and intrastate markets. Pursuant to the mandates of section 258, in the
*1998 Slamming Order and Notice* we adopted verification procedures and
liability rules, as well as rules regarding the administration of
preferred carrier freezes,[^42] in order to deter the incidence of
slamming by both interstate and intrastate carriers.[^43] Importantly,
in the *1998 Slamming Order and Notice* we also stated that our slamming
rules are intended to establish a new comprehensive framework, in
accordance with the provisions of section 258, to combat aggressively
and deter slamming in the future.[^44]

The truth-in-billing guidelines we adopt in this Order are intended to
function as a critical component of the Commission\'s verification
procedures. Many commenters have indicated that unclear bills prevent
customers from realizing that their carrier of choice has been
switched.[^45] A clear indication on the bill of who is providing
service and whether the service provider has changed since the last bill
provides a necessary final step in the verification process by allowing
customers readily to detect unauthorized changes. Thus, our first
principle, requiring telephone bills to indicate when a consumer\'s
presubscribed interstate or intrastate carrier has been changed, is
adopted as a verification requirement. Our second principle, requiring
bills to provide full and non-misleading descriptions of services, will
also serve a verification function, by helping consumers to detect
slamming by ensuring that consumers do not confuse the name of any
carrier with the service it provides.[^46] Finally, our third principle,
requiring telephone bills to contain clear and conspicuous disclosure of
consumer inquiry information,[^47] will enable consumers to report
slamming and begin the process of returning to their authorized
carriers. Therefore, these truth-in-billing principles serve as the
final step in verifying service provider changes, and such rules are
authorized by section 258 of the Act.

Our truth-in-billing principles and guidelines also will deter carriers
from engaging in unjust and unreasonable practices in violation of
section 201(b). Under section 201(b), carrier practices must be just and
reasonable. As we stated above, the Commission has authority to
promulgate rules implementing that requirement as to the provision of
interstate services. Thus, section 201(b) provides further authority for
the guidelines adopted herein. We emphasize that a carrier\'s provision
of misleading or deceptive billing information is an unjust and
unreasonable practice in violation of section 201(b) of the Act.[^48]
The principles and guidelines established in this Order are intended to
define more specifically what would constitute a violation of section
201 in the billing context for the covered carriers. Moreover, the
implementation of the general principles and guidelines set forth in
this Order, such as requiring clear descriptions of services for which
charges appear on the bill, will facilitate consumer detection of fraud,
and thereby deter unscrupulous carriers from engaging in unreasonable
practices such as cramming. In this regard, we note that the record
supports our finding in the *Notice* that consumer difficulty in
identifying unauthorized charges in telephone bills is a significant
factor in the ability of unscrupulous entities to engage successfully in
cramming.[^49]

Some commenters contend that our jurisdiction to adopt rules concerning
carrier billing, if it exists at all, exists only pursuant to our
ancillary jurisdiction under Title I of the Act.[^50] The Commission has
previously stated that it has jurisdiction under Title II to regulate
the manner in which a carrier bills and collects for its own interstate
offerings, because such billing is an integral part of that carrier\'s
communications service.[^51] The guidelines adopted here apply to the
carrier providing service to customers, not to those carriers\' billing
agents. Thus, for example, even where an interexchange carrier (or other
carrier) uses the billing and collection services of a LEC or other
third-party billing agent, the interexchange carrier still bears the
responsibility of ensuring that such charges appear on the bill remitted
to the consumer in a manner that complies with the principles set forth
in this Order. The Commission\'s *Detariffing Order* specifically stated
that a carrier\'s billing and collection for its own service, as opposed
to billing services provided to other carriers, *is* subject to the
Commission\'s Title II jurisdiction.[^52] Billing, like all other
practices for and in connection with interstate service, must be just
and reasonable.[^53] Therefore we find that we possess Title II
jurisdiction to adopt the principles and guidelines set forth herein,
and no reliance on our ancillary jurisdiction is necessary.

Notwithstanding the requirement of our *1998 Slamming Order and Further
Notice* that states must accept the same verification procedures as
prescribed by the Commission,[^54] states will be free to continue to
enact and enforce additional regulation consistent with the general
guidelines and principles set forth in this Order, including rules that
are more specific than the general guidelines we adopt today.[^55] In
addition to whatever powers they may have to enforce their rules under
state law, states also have express authority under section 258 to
enforce the Commission\'s verification procedure rules, including the
principles and guidelines adopted here, with respect to intrastate
services.[^56] We are aware of several states that have existing
regulations that are consistent with the truth-in-billing guidelines we
adopt here. For example, Pennsylvania has previously adopted
\"regulations to impose fair and equitable standards governing billing
and customer complaint procedures.\"[^57] Michigan prohibits the
provision of misleading information in local exchange telephone bills,
and requires notification of new services or changes in existing
service.[^58] We support these efforts. Additionally, we note that the
National Association of Regulatory Utilities Commissions (NARUC) has
published a White Paper giving guidance to states on how to provide
consumer protection in the area of telephone service, including
proposals to increase the clarity of telephone bills.[^59] In setting
forth its proposals, NARUC highlighted the need for \"clear billing that
customers can easily read and understand\" and noted that \"\[i\]n many
cases, this is not true of current telecommunications company bills,
particularly those that come from the local exchange company.\"[^60]
Many of the principles and guidelines adopted in this Order are
consistent with NARUC\'s proposals. We look upon this Order as another
phase of our partnership with the states to promote competition and to
combat telecommunications-related fraud.[^61] Through information
sharing and dialogue, we intend to work together with the states towards
the common objective of truth-in-billing.

Finally, we note that we possess complementary but distinct jurisdiction
with the Federal Trade Commission (FTC) to ensure that consumers are
treated fairly with regard to their telephone bills. The FTC does not
have jurisdiction over activities of common carriers subject to Title II
of the Communications Act.[^62] Congress has, however, in limited
circumstances, granted the FTC concurrent authority to establish rules
relating to certain areas of telephone billing and collection. For
example, the Telephone Disclosure and Dispute Resolution Act of 1992
(TDDRA) requires both the FCC and the FTC to adopt separate,
complementary rules to promote legitimate pay-per-call services and
protect telephone subscribers from fraudulent and abusive practices from
both carriers and non-carrier entities, respectively.[^63] We have
enacted regulations pursuant to section 228 that, *inter alia*, require
carriers to show, in a portion of the bill separate from ordinary
telephone charges, the amount of pay-per-call charges, the type of
services for which the consumer is being charged, and the date, time,
and duration of pay-per-call calls.[^64] We also require such
segregation for interstate information charges assessed pursuant to a
presubscription or comparable agreement.[^65] The FTC is working
currently to extend its pay-per-call authority to enact billing dispute
rights akin to those available under the Fair Credit Reporting Act.[^66]
Our truth-in-billing guidelines will compel subject carriers to provide
consumers with clear and necessary information in order to make informed
choices and safeguard themselves against fraud. The FTC states that the
goals of this truth-in-billing proceeding dovetail with the objectives
of its own pay-per-call rulemaking, and that \"\[c\]learer bills that
provide non-deceptive information will enhance the ability of consumers
to take advantage of the improved billing dispute rights for
telephone-billed purchases contemplated in the FTC\'s proposed Rule
revisions.\"[^67] We agree and shall continue to work closely with the
FTC on ways to exercise our respective jurisdictions to ensure that all
consumers receive the benefit of clear and understandable telephone
bills.

**C. Specific Truth-in-Billing Guidelines**

**1.Clear Organization and Highlighting New Service Provider
Information**

We adopt the threshold principle set forth in the *Notice* that
telephone bills must be clearly organized and highlight new service
provider information.[^68] We conclude that such a basic principle is
essential to facilitate consumers\' understanding of services for which
they are being charged, and thereby discourage consumer fraud such as
slamming. The goal of these requirements is to deter slamming, as well
as cramming, and accordingly, we possess jurisdiction to impose these
requirements under sections 201(b) and 258 of the Act.[^69] Based on our
review of the record and experience handling consumer complaints of
fraudulent carrier practices, we further conclude that implementation of
this principle translates into three broad, binding guidelines on which
we sought comment in the *Notice*: (1) the name of the service provider
associated with each charge must be clearly identified; (2) charges must
be separated by service provider; and (3) clear and conspicuous
notification of any change in service provider must be made
manifest.[^70] Through ensuring that the billed information concerning
service providers is clear and conspicuous, these guidelines enhance
consumers\' ability to review individual charges contained in their
telephone bills and detect unwarranted charges or unauthorized changes
in their service arrangements.

In our view, as well as that of virtually all commenters who addressed
this issue,[^71] a clear description of the name of the service provider
is both rudimentary to any reasonable billing practice and essential to
combat unfair carrier practices, including slamming and cramming.
Consumers will be able to detect whether or when they have been slammed,
crammed, or even overcharged only if they can readily identify their
current service providers. Clear identification of service providers is
also an essential predicate for consumers to be able to communicate
complaints and dispute billed charges.[^72] Indeed, our complaint
experience suggests that consumers are both confused and potentially
hampered in obtaining information about billed charges or lodging
complaints when the only entity name associated with a charge is, for
example, that of a \"billing aggregator.\"[^73] Regardless of whether
the billing aggregator can handle the consumer inquiry or complaint on
behalf of the service provider,[^74] we believe that identification of
the service provider is essential to enable consumers to monitor their
service arrangements and judge the accuracy of the charges levied.

We agree with NAAG that it is both unreasonable and unfair to expect
consumers to undertake extensive investigations on their own simply to
discover the identity of the service provider who placed a charge on
their bill.[^75] Accordingly, we find that, consistent with most
carriers\' existing practices,[^76] our truth-in-billing guidelines
require that the name of the service provider must be clearly listed on
the bill in connection with that entity\'s charges to the consumer.[^77]

We conclude that, where telephone bills include charges from more than
one service provider, the charges should be displayed according to
service provider with clear visual separation \-- although not
necessarily separate pages \-- to distinguish the different providers.
In our view, this provider-based means of presenting charges establishes
a logical, unambiguous framework to associate charges with a particular
service provider, which in turn promotes clarity in billed charges and
reduces customer confusion that gives rise to fraudulent carrier
practices. In response to our query in the *Notice*,[^78] commenters
generally favor as most effective and economical a provider-based bill
format over grouping charges exclusively by service category.[^79] We
agree that listing charges by service provider should produce bills that
can be reviewed by consumers more easily than those that would list
charges by service type, and facilitate the prompt detection of
unreasonable and fraudulent carrier practices. For instance, if a
consumer were slammed, a bill segregated by provider would show, in a
distinct portion of the bill, all the charges billed on behalf of the
unauthorized carrier. A bill segregated by service type, on the other
hand, could list together long distance charges from the unauthorized
carrier, the authorized carrier, and any carrier that was used to place
dial-around calls. This intermingling of authorized and unauthorized
charges could make it more difficult for a consumer to realize that he
or she has been slammed.

It appears that listing charges by service provider presently is the
industry standard.[^80] Several carriers that are currently engaged in,
or recently have completed, billing improvement projects report
favorable customer reaction to bills that segregate charges by service
provider.[^81] Some commenters also note that listing charges by service
provider rather than by service type avoids the confusion that might
ensue if each component of a bundled service package were required to be
listed and priced separately.[^82] In particular, we agree with the
observations of several commenters that consumers understand the bundled
offerings they purchase in terms of the single overall price of the
services provided by carrier, and would be confused if the bundled
offering were broken apart and the component parts priced separately
solely for billing purposes.[^83]

As a final corollary to our guidelines concerning providers, we conclude
that new service providers must be clearly and conspicuously identified
on the bill. We contemplate that such clear and conspicuous
identification would involve all service providers that did not bill for
services on the previous billing statement, and would describe, where
applicable, any new presubscribed or continuing relationship with the
customer.[^84] Clear identification of new service providers will
improve consumers\' ability to detect slamming.[^85] Currently,
telephone bills do not always clearly show when there has been a change
in presubscribed carriers. Telephone subscribers may realize that their
presubscribed interexchange carrier has been changed only if they notice
a carrier change charge on their bill.[^86] Moreover, as noted in our
*Notice*, the difficulty in detecting a change in carriers may be
compounded by carriers that use potentially misleading names so that
consumers may believe that a carrier\'s name refers to a service
offering, rather than being the name of a carrier.[^87] As noted
previously, our recently enacted anti-slamming regulations can be fully
effective only if consumers are able to detect promptly that a slam has
occurred. Because our new slamming rules absolve consumers of liability
for unpaid charges by unauthorized carriers for a period of 30 days
after a slam has occurred, the efficacy of such rules hinge on consumers
being able reasonably to discover a slam on the first bill that they
receive after the unauthorized change in service occurs.[^88] In the
*1998 Slamming Order and Further Notice*, we recognized the importance
of the telephone bill in providing notice of a carrier change.[^89]

Clear identification of new providers also will improve consumers\'
ability to detect cramming. We find that consumers\' discovery of
fraudulent charges would be prompted by noticing that an unfamiliar
service provider has charges appearing on the bill. Indeed, because
cramming complaints most commonly emanate from charges levied by service
providers that do not have a pre-existing business relationship with the
consumer,[^90] highlighting the name of a new service provider should
prompt a subscriber to examine closely the particular charges billed by
that provider and facilitate detection of cramming. Moreover, although
many LECs now participate in voluntary anti-cramming guidelines that
enable LECs to remove cramming charges from the bill,[^91] such measures
do not protect consumers who pay their bills without realizing that they
have been crammed. TCA cites results of a recent survey involving over
400 randomly selected Texas consumers who filed cramming complaints with
the Texas Commission. Forty-four percent of the survey respondents
claimed to have paid unauthorized charges totalling between \$11 and
\$50. Another 25 percent paid unauthorized charges between \$51 and
\$100, and 21 percent paid charges exceeding \$100.[^92] Our complaint
records also indicate that consumers often pay unauthorized recurring
charges for several months before they realize the questionable nature
of the charges.[^93] In our view, clear identification of new service
providers will appropriately signal to consumers the need to scrutinize
their bills to make sure that they are being billed only for authorized
services. Moreover, some crammed charges may involve \"telephone-billed
purchases\"[^94] which trigger a range of consumer rights and
protections under the TDDRA[^95] and the Federal Trade Commission\'s
implementing regulations. Our provider identification guidelines, which
facilitate consumers\' detection of crammed charges, appropriately
protect consumers\' opportunity to assert those rights.

In adopting these provider-based identification guidelines, we have
considered the substantial implementation concerns raised by carriers in
response to the *Notice* proposal that telephone bills explain any new
types of charges appearing on the bill for the first time.[^96]
Virtually all carriers assert that their current billing systems cannot
conduct a month-to-month comparison of all charges as would be necessary
to identify and explain all new services being billed for the first
time, and that the modifications necessary to perform this function
would be prohibitively expensive.[^97]

Carriers have discretion to determine the best means to highlight the
required information; we do not require that separate bill pages be used
to show the charges billed by each service provider. Again, we are
cognizant of commenters\' concerns that any rigid formatting rule that
required separate pages, or produced \"dead space\" on the bill, may
frustrate consumers[^98] and substantially, or even prohibitively,
increase carriers\' billing expenses.[^99] Accordingly, we do not
mandate any particular means of complying with the guidelines set forth
herein, but rather permit and contemplate that carriers will employ a
variety of practices that would be consistent with this Order. For
example, following suggestions by the FTC and NCL, colored ink or
different fonts or type sizes, along with explanatory notes, could be
used to highlight, within the body of the bill or on an existing summary
page, the names of new presubscribed carriers and service
providers.[^100] In adopting a provider-based guideline and affording
wide latitude to determine the most efficient way to convey the service
provider information, we have balanced consumers\' need for clear,
logical, and easily understood charges against concerns that rigid
formatting and disclosure requirements would inhibit innovation and
greatly increase carrier costs.

**2.Full and Non-Misleading Billed Charges**

We adopt the second core principle set forth in the *Notice* that bills
should contain full and non-misleading descriptions of the service
charges that appear therein. In our view, providing clear communication
and disclosure of the nature of the service for which payment is
expected is fundamental to a carrier\'s obligation of reasonable charges
and practices. Indeed, we find it difficult to imagine any scenario
where payment could be lawfully demanded on the basis of inaccurate,
incomplete, or misleading information.[^101] Moreover, to permit such
practices in the context of telecommunications services is particularly
troublesome in light of the rapid technological and market developments,
and associated new terminology, that can confuse even the most informed
and savvy telecommunications consumer. Accordingly, as discussed below,
we adopt three guidelines that implement this core disclosure principle.

**a. Billing Descriptions**

We conclude that services included on the telephone bill must be
accompanied by a brief, clear, plain language description of the
services rendered.[^102] The description of the charge must be
sufficiently clear in presentation and specific enough in content so
that customers can accurately assess that the services for which they
are billed correspond to those that they have requested and received,
and that the costs assessed for those services conform to their
understanding of the price charged. Requiring clear descriptions of
billed charges will assist consumers in understanding their bills, and
thereby, deter slamming, as well as cramming.

In the *Notice*, we observed that telephone bills often contain vague or
inaccurate descriptions of the services for which the customer is being
charged. For example, many complaints we have received involve charges
identified on local telephone bills simply as \"monthly fee\" or \"basic
access,\" without further explanation.[^103] The record in this
proceeding persuades us that unclear or cryptic telephone bills
exacerbate consumer confusion, as well as the problems of cramming and
slamming.[^104] Indeed, a common theme voiced in the consumer complaints
we receive is that telephone bills contain insufficient information to
enable consumers to determine the nature of the service for which they
are being billed. In our view, clear billing descriptions of the
services rendered will reduce these problems. Clear and easily
understood service descriptions will enable consumers to verify the
services they have ordered, thus facilitating the detection of slamming
and cramming. Although the requirement of clear identification of
service providers, discussed earlier, will solve a large portion of the
problem, it does not eliminate the potential for fraudulent carrier
practices. For example, the record indicates that some carriers choose
corporate names that sound like telecommunications services, *e.g.,*
\"Phone Calls,\" to confuse consumers and facilitate cramming, while
others use corporate names such as \"I Don\'t Know,\" \"Whatever,\" and
\"Anyone is OK,\" as a device to trick consumers into unwittingly
selecting the deceiver as their long-distance service provider.[^105]
Requiring descriptions of services, in combination with the clear
identification of service providers, assists in the detection of
slamming by enabling consumers to distinguish between the names of
services ordered and the names of carriers. Accordingly, our
jurisdiction to impose this requirement stems from section 258 and its
goal of deterring slamming.[^106]

We contemplate that sufficient descriptions will convey enough
information to enable a customer reasonably to identify and to
understand the service for which the customer is being charged.[^107]
Conversely, descriptions that convey ambiguous or vague information,
such as, for example, charges identified as \"miscellaneous,\" would not
conform to our guideline.[^108] Similarly, in our view, a charge
described by what it is *not*, such as, for example, \"service not
regulated by the Public Service Commission\" is inherently ambiguous and
does not disclose sufficient information. There is no way for a consumer
to discern from this description that the charge refers to, for example,
inside wiring maintenance insurance.[^109]

Although carriers must provide sufficient information, we emphasize that
full descriptions do not mean redundant or unnecessary explanations. In
particular, carriers need not define those terms that are already
generally understood by consumers, such as \"local service\" or \"long
distance service.\" Similarly, carriers need not identify every long
distance call as being a long distance call. Rather, they may simply
identify a section of the telephone bill as \"long distance service,\"
followed by an itemized description of calls showing the destination
cities, the numbers dialed, the date, and the charge for each call. We
also invite carriers to consider using graphical presentations such as
symbols, color coding, etc., to identify services in a space-efficient
manner.[^110] Such methods may make it easier for small carriers to
comply with our rules since it may afford them flexibility to work
within the technical parameters of their current billing systems. We do
not prescribe any particular methods of presentation, organization, or
language, but rather encourage carriers to be innovative in designing
bills that provide clear descriptions of services rendered.

A few commenters have expressed concern that including full descriptions
of the services appearing on telephone bills could overburden the rather
limited capabilities of some carrier legacy billing systems.[^111] In
response, we point out that several carriers recently have undertaken
efforts to improve their billing formats, after recognizing that the
format of old bills did not meet consumers\' needs.[^112] More
importantly, we simply cannot accept that it is reasonable for consumers
to be deprived of clear descriptions of the services they may have
purchased because carriers have not upgraded their systems to
accommodate this most basic of disclosure obligations. Nor are we
persuaded that the meaningful consumer protection against slamming and
cramming that our service description guideline will provide should be
held hostage to claims of antiquated billing processes. Moreover, we
believe the flexibility permitted under our guidelines affords carriers
many options to enable them to provide clear and meaningful service
descriptions that may not necessitate costly modifications to their
existing billing systems. In any event, we agree with FTC and TOPC that
telephone bills that accurately describe the services and charges
appearing on them will enable consumers to take greater advantage of the
new products and services available in the telecommunications
marketplace.[^113]

Although we decline to formulate standardized descriptions, we encourage
carriers to develop uniform terminology, as recommended by NCL, Bills
Project, and the Kansas Commission.[^114] We believe that industry is
better equipped than the Commission to develop, in conjunction with
consumer focus groups, standardized descriptions that are compatible
with the character limitations for text messages and other operational
restrictions found in the systems currently used for billing. Adopting
understandable common descriptions for services offered could enable
consumers to comparison shop more readily, and thereby take full
advantage of the benefits of a competitive telecommunications market.

**b. \"Deniable\" and \"Non-Deniable\" Charges**

We further conclude that, where additional carrier charges are billed
along with local wireline service, reasonable practice necessitates that
carriers clarify when non-payment for service would not result in the
termination of the consumer\'s basic local service. More specifically,
we adopt the guideline we proposed in the *Notice* that telephone bills
differentiate between what are commonly referred to as \"deniable\" and
\"non-deniable\" charges.[^115] A \"deniable\" charge is a charge that,
if not paid, may result in the termination \-- \"denial\" \-- of the
customer\'s local exchange service. Conversely, a \"non-deniable\"
charge is a charge that will not result in the termination of the
customer\'s basic service for non-payment, even though the particular
service for which the charge has been levied, *e.g.*, paging service,
could be terminated.[^116] We agree with the comments of state
regulatory agencies and consumer advocacy groups that distinguishing
between such charges on consumers\' bills protects consumers from paying
contestable, unauthorized charges out of fear of losing basic telephone
service for non-payment.[^117] Based on this consumer protection
rationale, many states, including New York, Pennsylvania, Ohio,
California, Oregon, and Arizona have enacted similar requirements.[^118]
The FTC comments that providing this information on bills will reduce
slamming and cramming by enabling consumers to question charges without
fear of losing service.[^119] We agree that consumers should not be
intimidated into paying contestable charges because of fear that they
will lose telephone service. We likewise believe that consumers must be
fully empowered and apprised of their right to refuse to pay for
unauthorized charges. Accordingly, we conclude that carriers must
clearly identify on bills those charges for which non-payment will not
result in disconnection of basic, local service.[^120]

We agree with those commenters who state that the terms \"deniable\" and
\"non-deniable\" are inherently confusing, if not counter-intuitive, and
therefore fail to achieve the basic goal of signalling to consumers
their rights with respect to such charges.[^121] Rather than mandate any
particular means for accomplishing this goal, however, we merely require
that carriers clearly and conspicuously identify those charges for which
nonpayment will not result in termination of local service. We note with
approval the suggestions of some commenters that this may be best
accomplished by noting charges with an asterisk or other symbol
directing the consumer to an explanatory footnote.[^122] This footnote
could provide information similar to that mandated by the pay-per-call
provisions of the Act.[^123] Carriers may also elect to devise other
methods of informing consumers on the bill that they may contest charges
prior to payment.[^124]

We emphasize, however, that this guideline only applies where carriers
include in a single bill both \"deniable\" and \"non-deniable\" charges.
Accordingly, a carrier that bills directly for service that includes no
charges for basic, local wireline service would not have a disclosure
obligation. In this direct billing circumstance, we are persuaded that
consumers understand that, for example, their wireless or interexchange
service may be disconnected should they fail to pay the bill for the
specific service involved, but that their basic local service, billed on
a separate invoice, will not be disconnected.[^125] Accordingly,
requiring carriers to disclose such information on direct bills that
contain no basic local service charges would place a burden on carriers
without any corresponding consumer benefit. We further note that,
whether a charge is or is not \"deniable\" varies according to state
law. Our requirement is not meant to preempt states that have yet to
adopt such a distinction.

We are unpersuaded by some commenters that customers should be informed
of these rights through a \"dunning message\" issued prior to
termination of service for non-payment, rather than through the
telephone bill.[^126] Such an approach does not protect those consumers
who pay charges that they did not authorize out of the mistaken fear
that their service will be disconnected if they fail to pay.[^127] The
complaints we receive demonstrate that many consumers pay disputable
charges immediately, even if they believe the charge is unauthorized,
out of fear of losing local service. These consumers would not receive
any dunning notice and, thus, would remain unaware of their rights with
regard to these charges.

We are also not persuaded by those commenters who contend that this
guideline may lead to an increase in non-payment of legitimate charges
that will outweigh the consumer benefits.[^128] Although carriers must
clearly identify those charges for which non-payment will not affect
local service, the guideline does not prevent carriers from reminding
customers of their obligation to pay all authorized charges and of the
consequences, such as credit bureau reporting, of a failure to pay any
authorized charge. Carriers may, for instance, remind customers that
failure to pay a legitimate charge for paging would not result in the
customer\'s loss of local exchange service, but might result in
termination of the paging service, collection action by the paging
provider, and damage to the customer\'s credit rating. We find that such
notice will adequately deter consumers from withholding payment of
authorized charges. Moreover, insofar as consumers *do* have a right to
contest such charges without risk of losing basic service, any
suggestion to the contrary \-- either explicit *or implicit* \-- is
misleading and infringes on the customer\'s ability to exercise those
rights.

**c.Standardized Labels For Charges Resulting from Federal Regulatory
Action**

We conclude that the principle of full and non-misleading descriptions
also extends to carrier charges purportedly associated with federal
regulatory action. Consistent with our core principle that charges
should be clearly described in a manner that allows consumers to
understand them, we expressed concern in the *Notice* that consumers may
be less likely to engage in comparative shopping among service providers
if they are led erroneously to believe that certain rates or charges are
federally mandated amounts from which individual carriers may not
deviate.[^129] Moreover, we noted that complaints received by the
Commission indicate considerable consumer confusion with regard to
various line item charges appearing on their monthly service bills that
are assessed by carriers ostensibly to recover costs incurred as a
result of specific government action. Charges resulting from federal
regulatory action are \"charges, practices \[or\] classifications . . .
for and in connection with\" interstate communication service pursuant
to section 201(b), and accordingly, we possess jurisdiction to require
carriers to employ standardized labels for such charges.

We find that the substantial record on this issue supports our adoption
of guidelines to address customers\' confusion and potential for
misunderstanding concerning the nature of these charges. Specifically,
for the reasons discussed more fully below, we adopt our proposals that
require carriers to identify line item charges associated with federal
regulatory action through a standard industry-wide label and provide
full, clear and non-misleading descriptions of the nature of the
charges, and display a toll-free number associated with the charge for
customer inquiries. While we adopt guidelines to facilitate consumer
understanding of these charges and comparison among service providers,
we decline the recommendations of those that would urge us to limit the
manner in which carriers recover these costs of doing business.

We focus particularly on three types of line items that have appeared on
consumers\' bills. Specifically, the 1996 Act instructed the Commission
to establish support mechanisms to ensure that all Americans have access
to affordable telecommunications services. Pursuant to this directive,
the Commission is in the process of fundamentally altering the manner in
which long distance carriers pay for access to the networks of local
carriers and for supporting the universal availability of
telecommunications services at just, reasonable, and affordable
rates.[^130] Although the Commission did not direct the manner in which
carriers could recover their universal service contributions or access
fees directly from their customers,[^131] and substantially reduced the
access rates charged to long distance carriers to offset their new
universal service obligations,[^132] some carriers began including on
their customers\' bills line item charges purportedly intended to
recover these costs. These fees have been charged in connection with
consumers\' long distance service. The amounts charged and the name
describing the universal service-related fees, however, have varied
considerably among carriers. For example, some carriers have labelled
the fee as \"Universal Connectivity Charge,\" \"Federal Universal
Service Fee,\" \"Carrier Universal Service Charge,\" and even \"Local
Service Subsidy,\"[^133] and charges have ranged from \$.93 per bill to
5% of the customers\' net interstate and international charges.[^134]
Access related charges and associated names have likewise varied by
carrier.[^135] The nature of these charges is, in some instances,
further confused because different charges may be assessed on the
consumer\'s \"primary,\" or first line, than on a consumer\'s subsequent
or \"non-primary\" lines.[^136]

Local exchange carriers have also chosen to assess various line item
charges associated with federal regulatory action. Since 1985, the
Commission has allowed local exchange carriers to assess a \"subscriber
line charge,\" (SLC), also known as the end-user common line charge.
This charge allows local exchange carriers to recover a portion of the
costs for providing local loops.[^137] More recently, pursuant to the
dictates of the 1996 Act, the Commission permitted local exchange
carriers to recover through a line-item charge on end-user bills the
costs associated with implementing local number portability, which
allows a consumer to retain the same phone number when changing local
phone companies.[^138] This local number portability charge first
appeared on some consumers\' bills in February, 1999. The amount of the
charge, however, as well as the name describing it varies by carrier
(*e.g.*, \"number portability surcharge;\" \"local number portability
service charge;\" \"federal charge - service provider number
portability\").[^139]

The record in this proceeding supports our concern that the failure of
carriers to label and accurately describe certain line item charges on
their bills has led to increased consumer confusion about the nature of
these changes.[^140] Several factors appear to have contributed to this
confusion. The names associated with these charges as well as
accompanying descriptions (or entire lack thereof) may convince
consumers that all of these fees are federally mandated.[^141] In
addition, a lack of consistency in the way such charges are labelled by
carriers makes it difficult for consumers accurately to compare the
price of telecommunications services offered by competing
carriers.[^142]

In the *Notice*, we generally sought comment on the methods by which the
nature and purpose of these charges could be clarified. We adopt the
guideline proposed in our *Notice*, and supported by the great majority
of commenters, that line-item charges associated with federal regulatory
action should be identified through standard and uniform labels across
the industry. We agree that standardized labels will promote consumers\'
ability to understand their bills, thus facilitating their ability to
compare rates and packages among competing providers. Such comparisons
are very difficult when carriers choose different names for the same
charge. In considering which specific labels would be most accurate,
descriptive and consumer-friendly, however, we believe that consumer
groups are particularly well suited to assist in the development of the
uniform terms. Accordingly, through a further notice in this proceeding,
we encourage consumer and industry groups to come together, conduct
consumer focus groups, and propose jointly to the Commission standard
labels for these line item charges. We will choose the standard labels
based on the suggestions we receive in response to our *Further Notice*.

We decline to take a more prescriptive approach as to how carriers may
recover these costs. We recognize that several commenters assert that
service providers should be required to combine all regulatory fees into
one charge,[^143] or should be prohibited from separating out any fees
resulting from regulatory action.[^144] Other commenters urge us to go
even farther and require carriers to include on bills per-minute rates
that include all fees associated with the service.[^145] We decline at
this time to mandate such requirements, but rather prefer to afford
carriers the freedom to respond to consumer and market forces
individually, and consider whether to include these charges as part of
their rates, or to list the charges in separate line items.[^146] We
believe that so long as we ensure that consumers are readily able to
understand and compare these charges, competition should ensure that
they are recovered in an appropriate manner. Moreover, we are concerned
that precluding a breakdown of line item charges would facilitate
carriers\' ability to bury costs in lump figures. Insofar as the
regulatory-related charges have different origins, and are applied to
different service and provider offerings, we also question whether
implementation of a lump-sum figure for all charges resulting from
federal regulatory action could be presented in a manner in which
consumers could clearly understand the origin of such a charge. On the
other hand, we recognize that consumers may benefit from a simplified,
total charge approach. As a result, we encourage industry and consumer
groups to consider further whether some categorization and aggregation
of charges would be advisable. For example, we seek further comment on
whether the line item charges associated with long distance service
could be or should be identified as a single, uniformly described,
charge, while those charges associated with local service be identified
by a separate standardized term. Our goal is to enable consumers to make
comparisons among different service providers in connection with these
charges, but we expect that this end will be accomplished though several
means.

Although we adopt the guideline that charges be identified through
standard labels, carriers may nevertheless choose to include additional
language further describing the charges. We are persuaded by the record
not to adopt any particular \"safe-harbor\" language, as set forth in
the *Notice*, or mandate specific disclosures.[^147] Rather, we believe
carriers should have broad discretion in fashioning their additional
descriptions, provided only that they are factually accurate and
non-misleading. For example, for purposes of good customer relations, a
carrier may wish to elaborate on the nature and origin of its universal
service charge. A full, accurate and non-misleading description of the
charge would be fully consistent with our guideline. In contrast, we
would not consider a description of that charge as being \"mandated\" by
the Commission or the federal government to be accurate. Instead, it is
the carriers\' business decision whether, how, and how much of such
costs they choose to recover directly from consumers through separately
identifiable charges.[^148] Accordingly, to state or imply that the
carrier has no choice regarding whether or not such a charge must be
included on the bill or the amount of the charge would be
misleading.[^149] Our view is consistent with the recent decision of the
Federal-State Joint Board on Universal Service which recommended that
the Commission \"prohibit carriers from depicting \[universal service\]
charges as . . . mandated by the Commission or the federal government by
terms or placement on the bill.\"[^150]

In the *Notice*, we sought comment on whether it is a violation of
section 201(b) for a carrier to bill customers for more than their *pro
rata* share of universal service and access fees.[^151] Additionally, in
the *Second Recommended Decision*, the Joint Board recommended that the
Commission consider adopting a rule restricting a carrier from charging
a line item assessment in an amount greater than the carrier\'s
universal service assessment rate.[^152] We decline, however, to adopt
specific rules addressing these concerns. Some commenters assert that it
may be impractical accurately to allocate some line-item charges to an
individual customer on a per-bill basis.[^153] For example, a carrier\'s
universal service contributions may depend on variables whose values are
not known at the time the carrier issues a bill, such as the total
revenue contribution base of all carriers and the high-cost and
low-income projections for universal service support.[^154] At least one
commenter argues that carriers should be allowed to account for
uncollectibles, billing expenses, and administrative expenses in setting
the amount of their line item assessments for universal service.[^155]
Although we decline to adopt specific rules here, we caution that we
will not hesitate to take action on a case-by-case basis under section
201(b) of the Act against carriers who impose unjust or unreasonable
line-item charges.[^156]

We also decline suggestions to require carriers to provide a detailed
breakdown of their costs and cost reductions on their customer
bills.[^157] The purpose behind these proposals in the *Notice* was to
enhance consumers\' understanding of the costs of telecommunications
services, thereby increasing their ability to determine whether such
services are fairly priced. For example, as we reduce the cap on access
charges assessed by LECs against IXCs, it would be useful for an
individual consumer to be informed of the extent to which his or her IXC
passes those access charge reductions through to the consumer in the
form of lower long distance rates, and to be able to make comparisons
between IXCs on this basis. We agree, however, that long explanations of
a carrier\'s cost calculations may add complexity to telephone bills,
creating confusion that outweighs the benefits of providing such
descriptions.[^158] For these reasons, we also decline to adopt specific
language describing the distinction between primary and non-primary
residential lines. We conclude that LECs may craft their own
descriptions to convey the Commission\'s primary/non-primary definition
to their customers, provided that the information is conveyed truthfully
and accurately.[^159] We believe, however, that our purpose of enhancing
consumers\' understanding will be adequately met through the guidelines
adopted herein. Indeed, we expect that standard identification of the
charges associated with federal regulatory action, in conjunction with
accurate and non-misleading descriptions, will enable market forces to
reduce these charges to their most economically efficient level.[^160]
In addition, we note that unjust or unreasonable line-item charges are
also subject to challenge pursuant to section 201(b) of the Act.[^161]

We decline to specify any periodic notification to consumers providing
additional explanation of any charges resulting from federal regulatory
action.[^162] We believe our guideline requiring standard labels for
such charges should, even without further non-misleading description,
provide consumers with, at minimum, notice of these charges. In this
regard, we point out that such line-item charges, like all other charges
on the bill, are subject to our guideline requiring the prominent
display of a toll-free number for consumer inquiries and disputes.[^163]
We emphasize that carriers\' customer service representatives must be
prepared to explain fully the nature and purpose of these charges if
asked to do so.[^164] We believe that the requirements adopted here
strike a reasonable balance between the needs of consumers for access to
accurate and truthful information regarding these line-item charges and
any burden or cost that such requirements may impose on carriers.

In balancing the legitimate interest of consumers and carriers, we
reject suggestions that standardized labels would violate the First
Amendment. We therefore disagree with ACTA\'s comment that the
Commission cannot discourage use of other line-item labels \"as a matter
of constitutional law,\" if such descriptions are accurate.[^165] We
emphasize that we have not mandated or limited specific language that
carriers utilize to describe the nature and purpose of these charges;
each carrier may develop its own language to describe these charges in
detail. Commercial speech that is misleading is not protected speech and
may be prohibited.[^166] Furthermore, commercial speech that is only
potentially misleading may be restricted if the restrictions directly
advance a substantial governmental interest and are no more extensive
than necessary to serve that interest.[^167] Finally, commercial speech
that is neither actually nor potentially misleading may be regulated if
the government satisfies a three-pronged test: first, the government
must assert a substantial interest in support of its regulation; second,
the government must demonstrate that the restriction on commercial
speech directly and materially advances that interest; and third, the
regulation must be \"narrowly drawn.\"[^168] As explained below, our
requirement that carriers use standard terms to label charges resulting
from federal regulatory action passes this three-prong test.

First, the government\'s interest in standardized labelling is
substantial. The ultimate goal of our regulation is to ensure that
consumers pay fair and efficient rates, an interest the Supreme Court
found to be substantial in *Central Hudson*.[^169] As the record in this
proceeding demonstrates, line-item charges are being labelled in ways
that could mislead consumers by detracting from their ability to fully
understand the charges appearing on their monthly bills, thereby
reducing their propensity to shop around for the best value. Consumers
misled into believing that these charges are federally mandated, or that
the amounts of the charges are established by law or government action,
could decide that such shopping would be futile. In addition, lack of
standard labelling could make comparison shopping infeasible. Unlike
most products purchased by consumers, these line-item charges cannot be
attributed to individual tangible articles of commerce. For example,
when a consumer purchases socks from the local department store, the
consumer knows what item the bill refers to, whether it describes the
product as socks, men\'s wear, hosiery, etc. In contrast, a consumer
receives no tangible product in conjunction with a line-item charge on
his or her telecommunications bill. If one carrier labels this charge,
for example, as \"Access Charge,\" and another uses the term
\"FCC-Mandated Charge,\" a consumer will be unable to discern that these
labels refer to the same charges. This impedes the consumer\'s ability
to compare and contrast telecommunications services offered by competing
entities. The government\'s interest is substantial in preventing
fraudulent and misleading practices by carriers and ensuring that
consumers are able to make intelligent and well informed commercial
decisions in the increasingly competitive telecommunications market that
the 1996 Telecommunications Act is intended to foster. Moreover,
consumers have a First Amendment interest in obtaining information on
which to base a decision whether to buy a product, and this interest is
\"served by insuring that the information is not false or
deceptive.\"[^170]

Second, the proposed regulation directly advances the governmental
interest. The proposed regulation will ensure that the labels assigned
to charges related to federal regulatory action are consistent,
understandable, and do not confuse or mislead consumers. In addition,
the regulatory scheme will encourage carriers to provide consumers with
information that will enable them to understand their telecommunications
bills, and prevent carriers from misleading consumers into believing
they cannot \"shop around\" to find carriers that charge less for fees
resulting from federal regulatory action.

When they take effect, following selection of standardized labels, our
labelling regulations will be narrowly drawn to be no more extensive
than necessary to serve the government\'s interest. Narrow tailoring
requires a reasonable fit between regulatory ends and means: \"\[n\]ot
necessarily the single best disposition but one whose scope is \'in
proportion to the interest served.\'\"[^171] The requirement that we
adopt \-- requiring telecommunications carriers to use specified,
uniform labels to identify charges resulting from federal regulatory
action \-- is narrowly tailored to meet this substantial government
interest and does not appreciably affect carriers\' ability to describe
fully the nature and purpose of these charges in their own words. As
stated above, we have not mandated or limited specific language that
carriers utilize to describe the nature and purpose of these charges:
each carrier may develop its own language to describe these charges in
detail. We only prescribe that these charges be presented using a
standardized label, so that consumers can comparison shop. Our
standardized label requirement is analogous to the disclosure
requirements of the Truth in Lending Act (TILA).[^172] TILA and its
implementing regulations require, for example, that creditors in
consumer credit transactions disclose the amount financed and provide
descriptive explanations of the applicable annual percentage rate as
specified by the Federal Reserve Board.[^173] Although disclosure of the
annual percentage rate must meet detailed requirements governing how it
will be stated and calculated, these requirements have not been
challenged as contrary to the First Amendment. Our standardized label
requirement is even less onerous, requiring carriers to use the labels,
but otherwise leaving them free to determine how best to describe
charges related to federal regulatory action in a truthful and
nonmisleading manner. The government interest underlying the
standardized label requirement is also analogous to that underlying the
Truth in Lending Act. The purpose of that statute is \"to assure a
meaningful disclosure of credit terms so that the consumer will be able
to compare more readily the various credit terms available to him . . .
and to protect the consumer against inaccurate and unfair credit billing
and credit card practices.\"[^174] Similarly, the principles that we
adopt here seek to protect consumers from unreasonable billing practices
while enabling them to make informed choices in the increasingly
competitive telecommunications market that the Telecommunications Act of
1996 is intended to foster.

Finally, several commenters argue that *44 Liquormart v. Rhode
Island*[^175] prevents us from requiring carriers to employ standard
labels for charges resulting from federal regulatory action. We
disagree. In *44 Liquormart*, the Supreme Court struck down a ban on all
dissemination of price advertising for alcoholic beverages on First
Amendment grounds. Here, however, we ban no speech, so carriers remain
free to develop their own descriptions of the nature and purpose of
these charges, subject only to a labelling requirement. For this reason,
*44 Liquormart* is inapposite. Accordingly, we conclude that our
regulation is valid under the limited scrutiny that has been afforded
restrictions on commercial speech.

**3.Clear and Conspicuous Disclosure of Inquiry Contacts**

The final fundamental truth-in-billing principle we adopt is that
consumers must have the necessary tools to challenge charges for
unauthorized services. We conclude that carriers must prominently
display on their monthly bill a toll-free number or numbers by which
customers may inquire or dispute any change on that bill.[^176] This
telephone number shall be provided in a clear and conspicuous manner, so
that the customer can easily identify the appropriate number to use to
inquire about each charge.[^177] We are cognizant, however, that the
service provider is not necessarily the most appropriate entity for
consumers to call. A service provider may, for example, contract with
the LEC or an independent billing aggregator to provide inquiry and
dispute resolution services for charges billed through the local
telephone bill. A carrier may list a toll-free number for a billing
agent, clearinghouse, or other third party, provided that such party
possesses sufficient information to answer questions concerning the
customer\'s account and is fully authorized to resolve consumer
complaints on the carrier\'s behalf. This will enable customers to avoid
feeling that they are \"getting the run around.\" We decline to require
carriers to provide a business address on each telephone bill for the
receipt of consumer inquiries and complaints. As several commenters have
noted, most customers call when they have questions \-- they do not
write.[^178] Accordingly, the inclusion of a business address will not
significantly enhance consumers\' ability to contact the billing entity.
We do require, however, that each carrier make its business address
available upon request to consumers through its toll-free number, for
those consumers who wish to follow up their complaint or inquiry in
writing.[^179]

We conclude that conspicuous display of a toll-free inquiry and dispute
resolution number is an essential linchpin to consumers\' exercise of
the rights we seek to protect in this Order, as well as in other
proceedings such as our new slamming rules.[^180] Consumers often
experience considerable difficulty in contacting the entity whose
charges appear on the telephone bill.[^181] This results in delayed
resolution of billing problems, often necessitating the intervention of
other parties such as the LEC, the state public service commission, or
the Commission. Requiring that each telephone bill include at a minimum
a toll-free telephone number for the receipt of consumer inquiries and
complaints will minimize customer confusion regarding charges on
telephone bills and enable consumers to resolve their billing disputes
easily and promptly.[^182]

We decline at this time to adopt standards for the provision of accurate
information by carrier customer service representatives.[^183] We expect
such personnel to be well-trained and that the number of employees is
sufficient to handle call volumes, and we assume that competition will
provide a strong incentive for each carrier to set appropriate standards
on its own initiative. Although we decline to mandate any particular
standards for customer service, we remind carriers that the intentional
provision of untruthful or misleading information to a customer
regarding the nature and purpose of charges or fees would constitute a
violation of section 201(b) of the Act.[^184]

**III. FURTHER NOTICE OF PROPOSED RULEMAKING**

**A. Discussion**

**1. Application of Rules to CMRS Carriers**

As we indicated in the Order, we seek comment on whether the remaining
truth-in-billing rules we adopt in the wireline context should apply to
CMRS carriers. More specifically, we seek comment on whether such rules
should be imposed on CMRS carriers in order to protect consumers. As we
stated in the Order, we believe that all consumers expect and should
receive bills that are fair, clear, and truthful. However, absent
evidence that there is a problem with wireless bills, it might not be
necessary to apply the remaining rules in the CMRS context. Commenters
may wish to address the applicability of a section 10 forbearance
analysis. Those commenters who wish to apply such an analysis should
address the specific elements of the standard set forth in section
10.[^185] We also seek comment on the extent to which the presence of a
competitive market is relevant to consumers\' ability to protect
themselves from the harms we address here.

We also note growing evidence that some consumers are substituting
wireless for wireline service.[^186] To what extent does this phenomenon
affect our application of our guidelines to wireless providers? We also
seek comment more generally on the benefit that consumers would derive
from application of certain of the guidelines relative to the burden
that such application would impose on CMRS carriers. First, as we
indicated in the Order, all consumers are entitled to fair, clear, and
reasonable practices. We seek comment on how to implement this principle
in the CMRS context. For instance, we seek comment on the current
billing practices of CMRS providers, including the types and
descriptions of charges CMRS providers include in their bills.

Second, we seek comment on whether identifying new service providers and
\"deniable\" charges makes sense in the wireless context. For example,
because CMRS carriers are excluded from equal access obligations,[^187]
it appears that CMRS carriers will rarely if ever be required to
indicate a new long distance service provider on the bill. Similarly,
CMRS carriers indicate in their comments that, unlike the practice in
connection with billing for wireline carriers that can give rise to
cramming, CMRS carriers do not at this time include charges for services
rendered by third party entities.[^188] We seek comment on these
assertions. Do CMRS providers bill for any other service providers? If
so, for what types of services and how pervasive are these billing
practices? Likewise, CMRS carriers, as non-LECs, that do their own
billing do not have to distinguish between \"deniable\" and
\"nondeniable\" charges because non payment of charges on a CMRS bill
would not result in termination of basic local wireline service.[^189]
Therefore, our guideline to identify \"deniable\" charges may have no
relevance, and add no benefit, to consumers\' CMRS bills.[^190]

**2. Standard Labels for Line-Item Charges**

As discussed in section II(C)(2)(c), we adopt the guideline that
carriers must use standardized labels to refer to certain charges
relating to federal regulatory action. We seek comment, however, on the
specific labels that carriers should adopt. We tentatively conclude that
the following labels would be appropriate: \"Long Distance Access\" to
identify charges related to interexchange carriers\' costs for access to
the networks of local exchange carriers; \"Federal Universal Service\"
to describe line items seeking to recover from customers carriers\'
universal service contributions; and \"Number Portability\" to describe
charges relating to local number portability. We tentatively conclude
that such labels will adequately identify the charges and provide
consumers with a basis for comparison among carriers, while at the same
time be sufficiently succinct such that most carriers will be able to
use them without requiring that they modify the field lengths of their
current billing systems. We seek comment on these tentative conclusions.
In addition, we seek comment on alternative labels, or appropriate
abbreviations for the labeling of these charges. For example, the
Florida Commission suggests the terms \"Federal Long Distance Access
Fee,\" \"FCC Long Distance Access Fee,\" or \"Interstate Long Distance
Access Fee\" to identify access charges, and \"Federal Universal Service
Fee,\" \"FCC Universal Service Fee,\" or \"Interstate Universal Service
Fee\" for universal service related charges.[^191] Commenters should
explain the merit and basis for their proposed labels, including, for
example whether their proposals were chosen or evaluated by consumer
focus groups. Indeed, we believe that consumer groups, with input from
industry, can contribute greatly to our consideration of the appropriate
labels. Finally, we seek comment on how carriers should identify line
items that combine two or all of these charges into a single charge. We
encourage parties to attempt to reach consensus on the appropriate
labels.

**VI. PROCEDURAL MATTERS**

**A. Final Regulatory Flexibility Analysis**

As required by the Regulatory Flexibility Act (RFA),[^192] an Initial
Regulatory Flexibility Analysis (IRFA) was incorporated in the *Notice*
in Truth-in-Billing and Billing Format.[^193] The Commission sought
written public comment on the proposals in the *Notice*, including
comment on the IRFA. The comments received are discussed below. This
present Final Regulatory Flexibility Analysis (FRFA) conforms to the
RFA.[^194]

**1.Need for and Objectives of this Order and the Rules Adopted Herein**

Section 258 of the Act makes it unlawful for any telecommunications
carrier \"to submit or execute a change in a subscriber\'s selection of
a provider of telephone exchange service or telephone toll service
except in accordance with such verificatioHprocedures as the Commission
shall prescribe.\"[^195] Accordingly, the Commission adopts in this
Order principles to ensure that consumers receive thorough, accurate,
and understandable bills from their telecommunications carriers. First,
consumer telephone bills must be clearly organized, clearly identify the
service provider, and highlight any new providers; second, bills must
contain full and non-misleading descriptions of charges that appear
therein; and third, bills must contain clear and conspicuous disclosure
of any information the consumer may need to make inquiries about, or
contest charges, on the bill. Additionally, the Commission adopts
minimal, basic guidelines that explicate carriers\' obligations pursuant
to these broad principles. These principles and guidelines are designed
to prevent the types of consumer fraud and confusion evidenced in the
tens of thousands of complaints that this Commission, and state
commissions, receive each year.[^196] In enacting the principles and
guidelines contained in this Order, our goal is to implement the
provisions of sections 201(b) and 258 to prevent telecommunications
fraud, as well as to encourage full and fair competition among
telecommunications carriers in the marketplace.

**2.Summary of the Significant Issues Raised by the Public Comments in
Response to the IRFA**

In the IRFA, we found that the rules we proposed to adopt in this
proceeding may have a significant impact on a substantial number of
small businesses as defined by 5 U.S.C. § 601(3). The IRFA solicited
comment on the number of small businesses that would be affected by the
proposed regulations and on alternatives to the proposed rules that
would minimize the impact on small entities consistent with the
objectives of this proceeding.

PCIA, Liberty, RTG and others argue that the cost of compliance faced by
smaller carriers would be particularly burdensome.[^197] PCIA asserts
that medium- and small-sized carriers will be less likely to have
billing systems in place that \"can simply be \'tweaked\' to produce the
required modifications.\"[^198] Indeed, PCIA states that smaller
carriers may be forced to replace their entire billing systems in order
to comply with the format and content mandates proposed in the
*NPRM*.[^199] RTG agrees, arguing that rural carriers are particularly
sensitive to increased regulatory requirements with significant
costs.[^200]

The Office of Management and Budget (OMB) received a large number of
comments in response to the *NPRM*.[^201] The commenters generally agree
that new charges or services need to be easily identifiable on customer
bills; that definitions of services and other terms are difficult to
reach and could be counterproductive; that more information, including
point of contact toll-free numbers for service providers or billing
agents needs to be included in billing materials; that materials should
be clear, concise, and relatively simple; that the Commission must
account for costs of any changes to bills that will be passed on to
consumers in making decisions; that CMRS and other wireless firms that
provide services only to businesses should be exempt from most new
requirements that would be imposed on wireline carriers; that every
effort should be made so that billing standards are uniform across the
nation; that reseller information should be included; and that, where
possible, market-based solutions should be adopted unless there is
conclusory evidence that the Commission must enact regulations that
affect billing practices.[^202] As a result, OMB recommends that we not
impose undue burdens on wireless providers and small wireline services,
and urges that flexibility be given to small companies that may
experience significant cost and managerial issues related to
implementation of billing requirements.[^203] Moreover, OMB recommends
that the Commission allow companies sufficient time to address their
necessary Year 2000-related modifications to their computer systems as
well as modifying their billing systems to meet any new
requirements.[^204] OMB also recommends that the Commission make a
concerted effort to work with the industry to establish voluntary
guidelines in lieu of mandatory requirements that restrict the ability
of firms to tailor their billing to meet the needs of customers.[^205]

We have considered these comments and believe we appropriately balanced
the concerns of carriers that detailed rules may increase their costs
against our goal of protecting consumers against fraud. We have exempted
CMRS carriers from certain of our requirements on ground that the
requirements may be inapplicable or unnecessary in the CMRS
context.[^206] Moreover, we consider our principles and guidelines to be
flexible enough that carriers will be able to comply with them without
incurring unnecessary expense.

**3.Description and Estimates of the Number of Small Entities to Which
the Rules Adopted in the Order in CC Docket No. 98-170 May Apply**

The RFA directs agencies to provide a description of and, where
feasible, an estimate of the number of small entities that may be
affected by the adopted rules.[^207] The RFA generally defines the term
\"small entity\" as having the same meaning as the terms \"small
business,\" \"small organization,\" and \"small governmental
jurisdiction.\"[^208] In addition, the term \"small business\" has the
same meaning as the term \"small business concern\" under the Small
Business Act.[^209] A small business concern is one which: (1) is
independently owned and operated; (2) is not dominant in its field of
operation; and (3) satisfies any additional criteria established by the
Small Business Administration (SBA).[^210]

The most reliable source of information regarding the total numbers of
certain common carrier and related providers nationwide, as well as the
numbers of commercial wireless entities, appears to be data the
Commission publishes annually in its *Telecommunications Industry
Revenue* report, regarding the Telecommunications Relay Service
(TRS).[^211] According to data in the most recent report, there are
3,459 interstate carriers.[^212] These carriers include, *inter alia*,
local exchange carriers, wireline carriers and service providers,
interexchange carriers, competitive access providers, operator service
providers, pay telephone operators, providers of telephone toll service,
providers of telephone exchange service, and resellers.

The SBA has defined establishments engaged in providing \"Radiotelephone
Communications\" and \"Telephone Communications, Except Radiotelephone\"
to be small businesses when they have no more than 1,500
employees.[^213] Below, we discuss the total estimated number of
telephone companies falling within the two categories and the number of
small businesses in each, and we then attempt to refine further those
estimates to correspond with the categories of telephone companies that
are commonly used under our rules.

Although some affected incumbent LECs may have 1,500 or fewer employees,
we do not believe that such entities should be considered small entities
within the meaning of the RFA because they are either dominant in their
field of operations or are not independently owned and operated, and
therefore by definition not \"small entities\" or \"small business
concerns\" under the RFA. Accordingly, our use of the terms \"small
entities\" and \"small businesses\" does not encompass small ILECs. Out
of an abundance of caution, however, for regulatory flexibility analysis
purposes, we will separately consider small ILECs within this analysis
and use the term \"small ILECs\" to refer to any ILECs that arguably
might be defined by the SBA as \"small business concerns.\"[^214]

**Total Number of Telephone Companies Affected.** The U.S. Bureau of the
Census (\"Census Bureau\") reports that, at the end of 1992, there were
3,497 firms engaged in providing telephone services, as defined therein,
for at least one year.[^215] This number contains a variety of different
categories of carriers, including local exchange carriers, interexchange
carriers, competitive access providers, cellular carriers, mobile
service carriers, operator service providers, pay telephone operators,
personal communications services providers, covered specialized mobile
radio providers, and resellers. It seems certain that some of those
3,497 telephone service firms may not qualify as small entities or small
ILECs because they are not \"independently owned and operated.\"[^216]
For example, a PCS provider that is affiliated with an interexchange
carrier having more than 1,500 employees would not meet the definition
of a small business. It is reasonable to conclude that fewer than 3,497
telephone service firms are small entity telephone service firms or
small ILECs that may be affected by our principles and guidelines.

**Wireline Carriers and Service Providers.** The SBA has developed a
definition of small entities for telephone communications companies
except radiotelephone (wireless) companies. The Census Bureau reports
that there were 2,321 such telephone companies in operation for at least
one year at the end of 1992.[^217] According to the SBA\'s definition, a
small business telephone company other than a radiotelephone company is
one employing no more than 1,500 persons.[^218] All but 26 of the 2,321
non-radiotelephone companies listed by the Census Bureau were reported
to have fewer than 1,000 employees. Thus, even if all 26 of those
companies had more than 1,500 employees, there would still be 2,295
non‑radiotelephone companies that might qualify as small entities or
small ILECs. We do not have data specifying the number of these carriers
that are not independently owned and operated, and thus are unable at
this time to estimate with greater precision the number of wireline
carriers and service providers that would qualify as small business
concerns under the SBA\'s definition. Consequently, we estimate that
fewer than 2,295 small telephone communications companies other than
radiotelephone companies are small entities or small ILECs that may be
affected by our principles and guidelines.

**Local Exchange Carriers.** Neither the Commission nor the SBA has
developed a definition for small providers of local exchange services
(LECs). The closest applicable definition under the SBA rules is for
telephone communications companies other than radiotelephone (wireless)
companies.[^219] According to the most recent *Telecommunications
Industry Revenue* data, 1,371 carriers reported that they were engaged
in the provision of local exchange services.[^220] We do not have data
specifying the number of these carriers that are either dominant in
their field of operations, are not independently owned and operated, or
have more than 1,500 employees, and thus are unable at this time to
estimate with greater precision the number of LECs that would qualify as
small business concerns under the SBA\'s definition. Consequently, we
estimate that fewer than 1,371 providers of local exchange service are
small entities or small ILECs that may be affected by our principles and
guidelines.

**Interexchange Carriers**. Neither the Commission nor the SBA has
developed a definition of small entities specifically applicable to
providers of interexchange services (IXCs). The closest applicable
definition under the SBA rules is for telephone communications companies
other than radiotelephone (wireless) companies.[^221] According to the
most recent *Telecommunications Industry Revenue* data, 143 carriers
reported that they were engaged in the provision of interexchange
services.[^222] We do not have data specifying the number of these
carriers that are not independently owned and operated or have more than
1,500 employees, and thus are unable at this time to estimate with
greater precision the number of IXCs that would qualify as small
business concerns under the SBA\'s definition. Consequently, we estimate
that there are fewer than 143 small entity IXCs that may be affected by
our principles and guidelines.

**Competitive Access Providers.** Neither the Commission nor the SBA has
developed a definition of small entities specifically applicable to
competitive access services providers (CAPs). The closest applicable
definition under the SBA rules is for telephone communications companies
other than except radiotelephone (wireless) companies.[^223] According
to the most recent *Telecommunications Industry Revenue* data, 109
carriers reported that they were engaged in the provision of competitive
access services.[^224] We do not have data specifying the number of
these carriers that are not independently owned and operated, or have
more than 1,500 employees, and thus are unable at this time to estimate
with greater precision the number of CAPs that would qualify as small
business concerns under the SBA\'s definition. Consequently, we estimate
that there are fewer than 109 small entity CAPs that may be affected by
our principles and guidelines.

**Resellers (including debit card providers).** Neither the Commission
nor the SBA has developed a definition of small entities specifically
applicable to resellers. The closest applicable SBA definition for a
reseller is a telephone communications company other than radiotelephone
(wireless) companies.[^225] According to the most recent
*Telecommunications Industry Revenue* data, 339 reported that they were
engaged in the resale of telephone service.[^226] We do not have data
specifying the number of these carriers that are not independently owned
and operated or have more than 1,500 employees, and thus are unable at
this time to estimate with greater precision the number of resellers
that would qualify as small business concerns under the SBA\'s
definition. Consequently, we estimate that there are fewer than 339
small entity resellers that may be affected by our principles and
guidelines.

**Rural Radiotelephone Service.** The Commission has not adopted a
definition of small entity specific to the Rural Radiotelephone
Service.[^227] A significant subset of the Rural Radiotelephone Service
is the Basic Exchange Telephone Radio Systems (BETRS).[^228] We will use
the SBA\'s definition applicable to radiotelephone companies,
[i.e.]{.underline}, an entity employing no more than 1,500
persons.[^229] There are approximately 1,000 licensees in the Rural
Radiotelephone Service, and we estimate that almost all of them qualify
as small entities under the SBA\'s definition.

**International Services.** The Commission has not developed a
definition of small entities applicable to licensees in the
international services. Therefore, the applicable definition of small
entity is generally the definition under the SBA rules applicable to
Communications Services, Not Elsewhere Classified (NEC).[^230] This
definition provides that a small entity is expressed as one with \$11.0
million or less in annual receipts.[^231] According to the Census
Bureau, there were a total of 848 communications services providers,
NEC, in operation in 1992, and a total of 775 had annual receipts of
less than \$9,999 million.[^232] The Census report does not provide more
precise data.

**Telex.** Neither the Commission nor the SBA has developed a definition
of small entities specifically applicable to telex. The most reliable
source of information regarding the number of telegraph service
providers of which we are aware is the data the Commission collects in
connection with the *International Telecommunications Data*. According
to our most recent data, 5 facilities based and 2 resale provider
reported that they engaged in telex service. Consequently, we estimate
that there are fewer than 7 telex providers that may be affected by our
principles and guidelines.

**Message Telephone Service.** Neither the Commission nor the SBA has
developed a definition of small entities specifically applicable to
message telephone service. The most reliable source of information
regarding the number of message telephone service providers of which we
are aware is the data the Commission collects in connection with the
*International Telecommunications Data*. According to our most recent
data, 1,092 carriers reported that they engaged in message telephone
service.[^233] Consequently, we estimate that there are fewer than 1,092
message telephone service providers that may be affected by our
principles and guidelines.

**Cellular Licensees.** Neither the Commission nor the SBA has developed
a definition of small entities applicable to cellular licensees.
Therefore, the applicable definition of small entity is the definition
under the SBA rules applicable to radiotelephone (wireless) companies.
This provides that a small entity is a radiotelephone company employing
no more than 1,500 persons.[^234] According to the Bureau of the Census,
only twelve radiotelephone firms out of a total of 1,178 such firms
which operated during 1992 had 1,000 or more employees.[^235] Therefore,
even if all twelve of these firms were cellular telephone companies,
nearly all cellular carriers were small businesses under the SBA\'s
definition. In addition, we note that there are 1,758 cellular licenses;
however, a cellular licensee may own several licenses. In addition,
according to the most recent *Telecommunications Industry Revenue* data,
804 carriers reported that they were engaged in the provision of either
cellular service or Personal Communications Service (PCS) services,
which are placed together in the data.[^236] We do not have data
specifying the number of these carriers that are not independently owned
and operated or have more than 1,500 employees, and thus are unable at
this time to estimate with greater precision the number of cellular
service carriers that would qualify as small business concerns under the
SBA\'s definition. Consequently, we estimate that there are fewer than
804 small cellular service carriers that may be affected by the proposed
rules, if adopted.

**220 Mhz Radio Services.** Because the Commission has not yet defined a
small business with respect to 220 MHz services, we will utilize the SBA
definition applicable to radiotelephone companies, *i.e.*, an entity
employing no more than 1,500 persons.[^237] With respect to 220 MHz
services, the Commission has proposed a two-tiered definition of small
business for purposes of auctions: (1) for Economic Area (EA) licensees,
a firm with average annual gross revenues of not more than \$6 million
for the preceding three years and (2) for regional and nationwide
licensees, a firm with average annual gross revenues of not more than
\$15 million for the preceding three years. Given that nearly all
radiotelephone companies under the SBA definition employ no more than
1,500 employees (as noted *supra*), we will consider the approximately
1,500 incumbent licensees in this service as small businesses under the
SBA definition.

**Private and Common Carrier Paging.** The Commission has proposed a
two-tier definition of small businesses in the context of auctioning
licenses in the Common Carrier Paging and exclusive Private Carrier
Paging services. Under the proposal, a small business will be defined as
either (1) an entity that, together with its affiliates and controlling
principals, has average gross revenues for the three preceding years of
not more than \$3 million, or (2) an entity that, together with
affiliates and controlling principals, has average gross revenues for
the three preceding calendar years of not more than \$15 million.
Because the SBA has not yet approved this definition for paging
services, we will utilize the SBA\'s definition applicable to
radiotelephone companies, *i.e.*, an entity employing no more than 1,500
persons.[^238] At present, there are approximately 24,000 Private Paging
licenses and 74,000 Common Carrier Paging licenses. According to the
most recent *Telecommunications Industry Revenue* data, 172 carriers
reported that they were engaged in the provision of either paging or
\"other mobile\" services, which are placed together in the data.[^239]
We do not have data specifying the number of these carriers that are not
independently owned and operated or have more than 1,500 employees, and
thus are unable at this time to estimate with greater precision the
number of paging carriers that would qualify as small business concerns
under the SBA\'s definition. Consequently, we estimate that there are
fewer than 172 small paging carriers that may be affected by the
proposed rules, if adopted. We estimate that the majority of private and
common carrier paging providers would qualify as small entities under
the SBA definition.

**Mobile Service Carriers.** Neither the Commission nor the SBA has
developed a definition of small entities specifically applicable to
mobile service carriers, such as paging companies. As noted above in the
section concerning paging service carriers, the closest applicable
definition under the SBA rules is that for radiotelephone (wireless)
companies,[^240] and the most recent *Telecommunications Industry
Revenue* data shows that 172 carriers reported that they were engaged in
the provision of either paging or \"other mobile\" services.[^241]
Consequently, we estimate that there are fewer than 172 small mobile
service carriers that may be affected by the proposed rules, if adopted.

**Broadband Personal Communications Service.** The broadband PCS
spectrum is divided into six frequency blocks designated A through F,
and the Commission has held auctions for each block. The Commission
defined \"small entity\'\' for Blocks C and F as an entity that has
average gross revenues of less than \$40 million in the three previous
calendar years.[^242] For Block F, an additional classification for
\"very small business\" was added and is defined as an entity that,
together with their affiliates, has average gross revenues of not more
than \$15 million for the preceding three calendar years.[^243] These
regulations defining \"small entity\'\' in the context of broadband PCS
auctions have been approved by the SBA.[^244] No small businesses within
the SBA-approved definition bid successfully for licenses in Blocks A
and B. There were 90 winning bidders that qualified as small entities in
the Block C auctions. A total of 93 small and very small business
bidders won approximately 40% of the 1,479 licenses for Blocks D, E, and
F.[^245] Based on this information, we conclude that the number of small
broadband PCS licensees will include the 90 winning C Block bidders and
the 93 qualifying bidders in the D, E, and F blocks, for a total of 183
small entity PCS providers as defined by the SBA and the Commission\'s
auction rules.

**Narrowband PCS.** The Commission has auctioned nationwide and regional
licenses for narrowband PCS. There are 11 nationwide and 30 regional
licensees for narrowband PCS. The Commission does not have sufficient
information to determine whether any of these licensees are small
businesses within the SBA-approved definition for radiotelephone
companies. At present, there have been no auctions held for the major
trading area (MTA) and basic trading area (BTA) narrowband PCS licenses.
The Commission anticipates a total of 561 MTA licenses and 2,958 BTA
licenses will be awarded by auction. Such auctions have not yet been
scheduled, however. Given that nearly all radiotelephone companies have
no more than 1,500 employees and that no reliable estimate of the number
of prospective MTA and BTA narrowband licensees can be made, we assume,
for purposes of this IRFA, that all of the licenses will be awarded to
small entities, as that term is defined by the SBA.

**Specialized Mobile Radio (SMR).** The Commission awards bidding
credits in auctions for geographic area 800 MHz and 900 MHz SMR licenses
to firms that had revenues of no more than \$15 million in each of the
three previous calendar years.[^246] In the context of 900 MHz SMR, this
regulation defining \"small entity\" has been approved by the SBA;
approval concerning 800 MHz SMR is being sought. We do not know how many
firms provide 800 MHz or 900 MHz geographic area SMR service pursuant to
extended implementation authorizations, nor how many of these providers
have annual revenues of no more than \$15 million. One firm has over
\$15 million in revenues. We assume, for purposes of this IRFA, that all
of the remaining existing extended implementation authorizations are
held by small entities, as that term is defined by the SBA.

The Commission has held auctions for geographic area licenses in the 900
MHz SMR band, and recently completed an auction for geographic area 800
MHz SMR licenses. There were 60 winning bidders who qualified as small
entities in the 900 MHz auction. In the recently concluded 800 MHz SMR
auction there were 524 licenses awarded to winning bidders, of which 38
were won by small or very small entities.

**Cable Service Providers.** The SBA has developed a definition of small
entities for cable and other pay television services that includes all
such companies generating no more than \$11 million in revenue
annually.[^247] This definition includes cable systems operators, closed
circuit television services, direct broadcast satellite services,
multipoint distribution systems, satellite master antenna systems, and
subscription television services. According to the Census Bureau, there
were 1,758 total cable and other pay television services and 1,423 had
less than \$11 million in revenue. We note that cable system operators
are included in our analysis due to their ability to provide telephony.

**4.Summary of Projected Reporting, Recordkeeping and other Compliance
Requirements**

Our binding principles require that all telecommunications carriers,
both wireline and wireless, ensure (1) that consumer telephone bills be
clearly organized, clearly identify the service provider, and highlight
any new providers; (2) that bills contain full and non-misleading
descriptions of charges that appear therein; and (3) that bills contain
clear and conspicuous disclosure of any information the consumer may
need to make inquiries about, or contest charges, on the bill. In
addition, carriers must comply with the Commission\'s rules found in
Appendix A.

**5.Steps Taken to Minimize the Significant Economic Impact of This
Order on Small Entities and Small Incumbent LECs, Including the
Significant Alternatives Considered**

In this Order, we decline to adopt many of the proposals made in the
*Notice* that would be most costly for subject carriers to implement.
For example, we decline to adopt our proposal to require carriers to
indicate each new service ordered by a customer each month. We also
decline to require that carriers provide a detailed breakdown of their
costs incurred due to federal regulatory action, and instead permit
carriers to use their discretion to describe the nature and purpose of
these charges to their customers. We have adopted general principles
rather than stringent rules governing the organization of, and
information included in, customer bills. We also exempt CMRS carriers
from certain of our requirements.[^248] By implementing principles
through broad guidelines, we allow carriers considerable discretion to
satisfy their obligation in a manner that best suits their needs and
those of their customers, thus minimizing the economic impact on small
carriers to the greatest possible extent. The principles adopted here
are common-sense requirements that make good business sense, and we
believe that many, if not most, subject carriers already conform to
these requirements. Many carriers will therefore find that little or no
change to their existing billing practices will be needed.

The Commission will send a copy of the Order, including this FRFA, in a
report to be sent to Congress pursuant to the Small Business Regulatory
Enforcement Fairness Act of 1996.[^249] In addition, the Commission will
send a copy of the Order, including the FRFA, to the Chief Counsel for
Advocacy of the Small Business Administration. A copy of the Order and
FRFA (or summaries thereof) will also be published in the Federal
Register.[^250]

**B. Final Paperwork Reduction Act of 1995 Analysis**

The decision herein has been analyzed with respect to the Paperwork
Reduction Act of 1995, Pub. L. 104-13, and the Office of Management and
Budget (OMB) has approved some of its requirements in OMB No. 3060‑0854.
Among its recommendations, OMB \"strongly encourage\[d\]\" us not to
adopt an approach that imposes undue burden on wireless carriers, and
\"urges flexibility be given to small companies that may experience
significant cost\" as a result of our proposals.[^251] In this Order, we
have exempted CMRS carriers from certain of the requirements we adopt to
promote truth-in-billing.[^252] Moreover, we have established general
principles and guidelines, rather than rigid formatting rules, which
provide sufficient flexibility to small carriers to meet these
requirements without incurring undue cost. Some of the proposals have
been modified or added, however, and therefore some of the information
collection requirements in this item are contingent upon approval by the
OMB.

**C. Initial Regulatory Flexibility Analysis for Policies Proposed in
the Further Notice**

As required by the RFA, the Commission has prepared this present IRFA of
the possible, significant, economic impact on small entities of the
policies and rules proposed in this Further Notice.[^253] Written public
comments are requested on this IRFA. Comments must be identified as
responses to the IRFA and must be filed by the deadlines for comments on
the Further Notice provided below in section IV(E). The Commission will
send a copy of this Further Notice, including this IRFA, to the Chief
Counsel for Advocacy of the Small Business Administration.[^254] In
addition, the Further Notice and IRFA (or summaries thereof) will be
published in the Federal Register.[^255]

*Need for, and Objectives of, the Proposed Rules*. This Further Notice
seeks comment on a specific proposed rule concerning labelling of
charges relating to federal regulatory action. In addition, the Further
Notice seeks comment on whether certain of our truth-in-billing
requirements should be applicable to CMRS carriers. The proposals made
in this Further Notice are necessary to ensure that consumers receive
clear and accurate telecommunications bills.

*Legal Basis*. The proposed action is authorized under Sections 4(i) and
4(j), 201, 208, 254 and 303(r) of the Communications Act of 1934, as
amended, 47 U.S.C. §§ 151, 154(i), 154(j), 201, 208, 254, and 303(r).

*Description and Estimate of the Number of Small Entities to Which the
Proposed Rules Will Apply*. For purposes of this Further Notice, the
Regulatory Flexibility Act defines a \"small business\" to be the same
as a \"small business concern\" under the Small Business Act (SBA), 15
U.S.C. § 632, unless the Commission has developed one or more
definitions that are appropriate to its activities. Under the SBA,
\"small business concern\" is one that: (1) is independently owned and
operated; (2) is not dominant in its field of operation; and (3) meets
any additional criteria established by the SBA. In the FRFA pertaining
to this action, we described in detail the small entities potentially
subject to the rules adopted in this Order. These same entities possibly
would by affected by the proposal made in this Further Notices. For
purposes of this IRFA, therefore, we incorporate the list of potentially
affected entities contained in section IV(A)(3).

*Description of Projected Reporting, Recordkeeping and Other Compliance
Requirements*. We seek comment on a proposal designed to increase the
accuracy and understandability of telephone bills to consumers. Comment
is requested on a proposal to require uniform labels on line-item
charges resulting from federal regulatory action.

*Federal Rules that may Duplicate, Overlap, or Conflict with the
Proposed Rule*. None.

*Any significant alternatives minimizing impact on small entities and
are consistent with stated objectives*. None.

**D. Initial Paperwork Reduction Act of 1995 Analysis for the *Further
Notice***

The *Further Notice* portion of this Order contains either a proposed or
modified information collection. As part of its continuing effort to
reduce paperwork burdens, we invite the general public and the Office of
Management and Budget (OMB) to comment on the information collections
contained in the Further Notice of Proposed Rulemaking portion of this
Order, as required by the Paperwork Reduction Act of 1995, Pub. L. No.
104-13. Public and agency comments are due at the same time as other
comments on the Further Notice of Proposed Rulemaking; OMB comments are
due 60 days from date of publication of this Order in the Federal
Register. Comments should address: (a) whether the proposed collection
of information is necessary for the proper performance of the functions
of the Commission, including whether the information shall have
practical utility; (b) the accuracy of the Commission\'s burden
estimates; (c) ways to enhance the quality, utility, and clarity of the
information collected; and (d) ways to minimize the burden of the
collection of information on the respondents, including the use of
automated collection techniques or other forms of information
technology.

**E. Comment Filing Procedure**

Pursuant to Sections 1.415 and 1.419 of the Commission\'s rules, 47
C.F.R. §§ 1.415, 1.419, interested parties may file comments concerning
the standardized labels for charges relating to federal regulatory
action no later than 14 days after publication of this *Further Notice*
in the Federal Register. Parties shall file comments concerning
application of the truth-in-billing principles and guidelines to CMRS
carriers no later than 30 days after publication of the *Further Notice*
in the Federal Register. Parties may file reply comments no later than
21 days after publication of the *Further Notice* in the Federal
Register concerning charges relating to federal regulatory action, and
no later than 45 days after Federal Register publication concerning the
CMRS issues raised in the *Further Notice*. Comments will be limited to
15 pages, not including appendices. Comments may be filed using the
Commission\'s Electronic Comment Filing System (ECFS) or by filing paper
copies. [See]{.underline} [Electronic Filing of Documents in Rulemaking
Proceedings]{.underline}, 63 Fed. Reg. 24,121 (1998).

Comments filed through the ECFS can be sent as an electronic file via
the Internet to \<http://www.fcc.gov/e-file/ecfs.html\>. Generally, only
one copy of an electronic submission must be filed. If multiple docket
or rulemaking numbers appear in the caption of this proceeding, however,
commenters must transmit one electronic copy of the comments to each
docket or rulemaking number referenced in the caption. In completing the
transmittal screen, commenters should include their full name, Postal
Service mailing address, and the applicable docket or rulemaking number.
Parties may also submit an electronic comment by Internet e-mail. To get
filing instructions for e-mail comments, commenters should send an
e-mail to ecfs@fcc.gov, and should include the following words in the
body of the message, \"get form \<your e-mail address.\" A sample form
and directions will be sent in reply.

Parties who choose to file by paper must file an original and four
copies of each filing. If more than one docket or rulemaking number
appear in the caption of this proceeding, commenters must submit two
additional copies for each additional docket or rulemaking number. All
filings must be sent to the Commission\'s Secretary, Magalie Roman
Salas, Office of the Secretary, Federal Communications Commission, The
Portals, 445 Twelfth Street, S.W., Washington, D.C. 20554.

Parties who choose to file by paper should also submit their comments on
diskette. These diskettes should be submitted to David Konuch of the
Common Carrier Bureau\'s Enforcement Division, The Portals, 445 Twelfth
Street, S.W., Washington, D.C. 20554. Such a submission should be on a
3.5 inch diskette formatted in an IBM compatible format using
WordPerfect 5.1 for Windows or compatible software. Spreadsheets should
be saved in an Excel 4.0 format. The diskette should be accompanied by a
cover letter and should be submitted in \"read only\" mode. The diskette
should be clearly labelled with the commenter\'s name, proceeding
(including the docket number in this case \[CC Docket No. 98-170\]),
date of submission, and the name of the electronic file on the diskette.
The label should also include the following phrase \"Disk Copy - Not an
Original.\" Each diskette should contain only one party\'s pleadings,
preferably in a single electronic file. In addition, commenters must
send diskette copies to the Commission\'s copy contractor, International
Transcription Service, Inc., The Portals, Rm. CY-B400, 445 Twelfth
Street, S.W., Washington, D.C. 20554.

**F. Further Information**

For further information concerning this proceeding, contact David
Konuch, Enforcement Division, Common Carrier Bureau at (202) 418-0199
(voice), (202) 418-0485 (TTY).

Alternate formats (computer diskette, large print, audio cassette and
Braille) are available to persons with disabilities by contacting Martha
Contee at (202) 418-0260 (voice), (202) 418-2555 (TTY), or at
mcontee@fcc.gov. The First Report and Order and Further Notice of
Proposed Rulemaking can be downloaded in WP or ASCII text at:
http//www.fcc.gov/dtf/.

**V. ORDERING CLAUSES**

Accordingly, IT IS ORDERED, pursuant to Sections 1, 4(i) and (j),
201-209, 254, 258, and 403 of the Communications Act, as amended, 47
U.S.C. §§ 151, 154(i), 154(j), 201-209, 254, 258, and 403 that this
First Report and Order IS HEREBY ADOPTED, effective 30 days after
publication of a summary in the Federal Register. The collections of
information contained within are contingent upon approval by the Office
of Management and Budget.

IT IS FURTHER ORDERED that Part 64 of the commission\'s rules, 47 C.F.R.
§ 64, IS AMENDED as set forth in Appendix B hereto.

IT IS FURTHER ORDERED, pursuant to Sections 1, 4(i) and (j), 201-209,
254, and 403 of the Communications Act, as amended, 47 U.S.C. §§ 151,
154(i), 154(j), 201-209, 254, and 403, that this Further Notice of
Proposed Rulemaking IS HEREBY ADOPTED and comments ARE REQUESTED as
described above.

IT IS FURTHER ORDERED that, to the extent issues from CC Docket No.
97-181, *Defining Primary Lines*, are resolved here, we incorporate the
relevant portions of the record in that docket.

IT IS FURTHER ORDERED that the Commission\'s Office of Public Affairs,
Reference Operations Division, SHALL SEND a copy of this First Report
and Order and Further Notice of Proposed Rulemaking, including the Final
Regulatory Flexibility Analysis and the Initial Regulatory Flexibility
Analysis, to the Chief Counsel for Advocacy of the Small Business
Administration.

FEDERAL COMMUNICATIONS COMMISSION

Magalie Roman Salas

Secretary

**APPENDIX A - Final Rules**

1\. Part 64 of Title 47 of the Code of Federal Regulations (C.F.R.) is
amended as follows:

**Subpart Y \-- Truth-in-Billing Requirements for Common Carriers**

**64.2400 Purpose and scope**

\(a\) The purpose of these rules is to reduce slamming and other
telecommunications fraud by setting standards for bills for
telecommunications service. These rules are also intended to aid
customers in understanding their telecommunications bills, and to
provide them with the tools they need to make informed choices in the
market for telecommunications service.

\(b\) These rules shall apply to all telecommunications common carriers,
except that rules 64.2401(a)(2), 64.2401(b), and 64.2401(c) shall not
apply to providers of Commercial Mobile Radio Service as defined in
section 20.9 of the Commission\'s rules, or to other providers of mobile
service as defined in section 20.7 of the Commission\'s rules, unless
the Commission determines otherwise in a further rulemaking.

\(c\) *Preemptive effect of rules.* The requirements contained in this
subpart are not intended to preempt the adoption or enforcement of
consistent truth-in-billing requirements by the states.

**64.2401 Truth-in-Billing Requirements**

\(a\) *Bill organization.* Telephone bills shall be clearly organized,
and must comply with the following requirements:

(1)the name of the service provider associated with each charge must be
clearly identified on the telephone bill.

(2)where charges for two or more carriers appear on the same telephone
bill, the charges must be separated by service provider, and the
telephone bill must provide clear and conspicuous notification of any
change in service provider, including notification to the customer that
a new provider has begun providing service.

(i)\"Clear and conspicuous notification\" means notice that would be
apparent to a reasonable consumer.

(ii)\"New service provider\" is any provider that did not bill for
services on the previous billing statement. The notification should
describe the nature of the relationship with the customer, including a
description of whether the new service provider is the presubscribed
local exchange or interexchange carrier.

\(b\) *Descriptions of billed charges.* Charges contained on telephone
bills must be accompanied by a brief, clear, non-misleading, plain
language description of the service or services rendered. The
description must be sufficiently clear in presentation and specific
enough in content so that customers can accurately assess that the
services for which they are billed correspond to those that they have
requested and received, and that the costs assessed for those services
conform to their understanding of the price charged.

\(c\) *\"Deniable\" and \"Non-Deniable\" Charges.* Where a bill contains
charges for basic local service, in addition to other charges, the bill
must distinguish between charges for which non-payment will result in
disconnection of basic, local service, and charges for which non-payment
will not result in such disconnection. The carrier must explain this
distinction to the customer, and must clearly and conspicuously identify
on the bill those charges for which non-payment will not result in
disconnection of basic, local service. Carriers may also elect to devise
other methods of informing consumers on the bill that they may contest
charges prior to payment.

\(d\) *Clear and Conspicuous Disclosure of Inquiry Contacts.* Telephone
bills must contain clear and conspicuous disclosure of any information
that the customer may need to make inquiries about, or contest charges,
on the bill. Common carriers must prominently display on each bill a
toll-free number or numbers by which customers may inquire or dispute
any charge contained on the bill. A carrier may list a toll-free number
for a billing agent, clearinghouse, or other third party, provided that
such party possesses sufficient information to answer questions
concerning the customer\'s account and is fully authorized to resolve
consumer complaints on the carrier\'s behalf. Each carrier must make its
business address available upon request to consumers through its
toll-free number.

**APPENDIX B**

**PARTIES FILING COMMENTS TO THE *NOTICE OF PROPOSED RULEMAKING***

**RESPONSIVE PLEADINGS**

**CC DOCKET NO. 98-170**

Air Touch Communications (Air Touch)

America\'s Carriers Telecommunications Association (ACTA)

American Association of Retired Persons (AARP)

American Federation of Teachers (AFT)

American Public Communications Council (APCC)

Americatel Corporation (Americatel)

Ameritech

Association for Local Telecommunications Services (ALTS)

AT&T

Bell Atlantic

Bell Atlantic Mobile, Inc. (Bell Atlantic Mobile)

BellSouth Corp. (BellSouth)

Billing Reform Task Force (BRTF)

Bills Project

Cable and Wireless USA, Inc. (C&W)

California Public Utilities Commission and the People of the State of
California (California Commission)

Cellular Telecommunications Industry Association (CTIA)

Century Telephone Enterprises, Inc. (Century)

Coalition to Ensure Responsible Billing (Billing Coalition)

CommNet Cellular Inc. (CommNet)

Commonwealth Telephone Company (Commonwealth)

Competitive Telecommunication Association (CompTel)

DETECON, Inc. (Detecon)

Education and Library Networks Coalition (ELNC)

Electronic Commerce Association (ECA)

Irene A. Etzkorn

Excel Communications, Inc. (Excel)

Federal Trade Commission (FTC)

Florida Public Service Commission (Florida Commission)

Frontier Corp. (Frontier)

Georgia Consumers\' Utility Counsel Division of the Governor\'s Office
of Consumer Affairs (Georgia)

Global Telecompetition Consultants, Inc. (GTC)

GST Telecom Inc. (GST)

GTE Service Corp. (GTE)

GVNW Inc./Management (GVNW)

Independent Telephone & Telecommunications Alliance (ITTA)

Kansas Corporation Commission (Kansas Commission)

Liberty Cellular, Inc. (Liberty)

Maine Public Utilities Commission (Maine Commission)

MCI Telecommunications Corp. (MCI)

Media One Group, Inc. (Media One)

Minnesota Office of Attorney General (Minnesota OAG)

Mississippi Public Service Commission (Mississippi Commission)

Missouri Public Utilities Commission (Missouri Commission)

National Association of Attorneys General (NAAG)

National Association of Consumer Agency Administrators (NACAA)

National Association of State Utility Consumer Advocates (NASUCA)

National Consumers League (NCL)

Nevadacom, Inc. (Nevadacom)

New Networks Institute (NNI)

New York State Consumer Protection Board (NYCPB)

New York State Department of Public Service (NYDPS)

Nextel Communications, Inc. (Nextel)

Northwestern Indiana Telephone Company, Inc. (NITCO)

Omnipoint Communications, Inc. (Omnipoint)

Pennsylvania Public Utility Commission (Pennsylvania Commission)

Personal Communications Industry Association (PCIA)

Petroleum Communications, Inc. (Petroleum)

Pilgrim Telephone, Inc. (Pilgrim)

Primeco Personal Communications, L.P. (Primeco)

Project Mutual Telephone Cooperative Association (PMT)

Public Service Commission of West Virginia (West Virginia Commission)

Public Service Commission of Wisconsin (Wisconsin Commission)

Public Utilities Commission of Ohio (Ohio Commission)

Public Utility Commission of Texas (Texas Commission)

Quality Communications Inc. (QCI)

Qwest Communications Corporation (Qwest)

Rural Cellular Association (RCA)

Rural Telecommunications Group (RTG)

Rural Telephone Coalition (RTC)

SBC Communications, Inc. (SBC)

Small Business Alliance for Fair Utility Regulation (Small Business)

Southern Communications Services, Inc. (SCS)

Sprint Corporation (Sprint)

Telecommunications Resellers Association (TRA)

Teligent, Inc. (Teligent)

Texas Citizen\'s Action (TCA)

Texas Office of Public Utility Counsel (TOPC)

Time Warner Telecom, Inc. (Time Warner)

United States Cellular Corporation (US Cellular)

United States Telephone Association (USTA)

U S WEST Communications, Inc. (U S WEST)

USP&C

Utility Consumers\' Action Network (UCAN)

Vermont Public Service Board and Vermont Department of Public Service
(Vermont Commission)

Washington Utilities & Transportation Commission Staff (Washington
Commission Staff)

Wyoming Public Service Commission (Wyoming Commission)

**PARTIES FILING REPLY COMMENTS TO *NOTICE OF PROPOSED RULEMAKING***

**RESPONSIVE PLEADINGS**

**CC DOCKET NO. 98-170**

American Public Communications Council (APCC)

Americatel Corporation (Americatel)

Ameritech

Asian Pacific Islander American Consumer Coalition (APIACC)

AT&T

Bell Atlantic Mobile, Inc. (BAM)

BellSouth Corporation (BellSouth)

Billing Reform Task Force (BRTF)

Cellular Telecommunications Industry Association (CTIA)

Century Telephone Enterprises, Inc. (Century)

Coalition to Ensure Responsible Billing (Billing Coalition)

Comcast Cellular Communications, Inc. (Comcast)

Commonwealth Telephone Company (Commonwealth)

GVNW Inc./Management (GVNW)

MCI Telecommunications Corp. (MCI)

National Association of State Utility Consumer Advocates (NASUCA)

Nextel Communications, Inc. (Nextel)

Paging Network, Inc. (Paging Network)

Personal Communications Industry Association (PCIA)

Pilgrim Telephone, Inc. (Pilgrim)

PrimeCo Personal Communications, L.P. (PrimeCo)

Rural Utilities Service (RUS)

SBC Communications, Inc. (SBC)

Sprint Corporation (Sprint)

Texas Office of Public Utility Counsel (TOPC)

United States Telephone Association (USTA)

U S WEST Communications, Inc. (U S WEST)

**Separate Statement**

**of**

**Commissioner Susan Ness**

*Re:* *Truth-in-Billing and Billing Format*

Ignorance is *not* bliss. Confusing or misleading bills from
communications carriers are *not* good for consumers, or for
competition. This agency *does* have a role to play in making sure that
bills are fair, reasonable, and intelligible.

When we initiated this proceeding last September, I expressed my hope
that the Notice would enable us to work with carriers, consumers, and
other governmental entities to improve the billing process. I have been
encouraged by the progress that has resulted. Many in industry have
stepped up to their responsibility to improve their bills to make them
more intelligible, more consumer-friendly. Slamming and cramming will be
easier to detect, and therefore will be less likely to occur in the
first place.

At the same time, the rules we are adopting have sufficient flexibility
to allow for individualized experimentation by carriers. As new services
and bundles are brought to market, we need not \-- and do not \--
prevent carriers from crafting their bills in creative ways that meet
their competitive needs, so long as consumers\' fundamental rights are
protected.

I remain concerned about the prospect for misleading line items.
Additional changes lie ahead in universal service and access charges,
and we have already seen how some carriers have exploited the occasion
of change to confuse consumers and, in some instances, to increase
aggregate charges even as aggregate costs are declining. Competition
should go a long way to ensuring that consumers get more, and pay less.
But continued vigilance on billing practices will be essential to ensure
that consumers are not misled or mistreated.

Finally, I see no inherent reason why *wireless* carriers should not be
subject to the same general obligation as wireline carriers to render
bills that are fair, clear, and truthful. But I am mindful that the
billing practices of wireless carriers have generated only an incredibly
small number of complaints. Given that any rules \-- even flexible ones
\-- impose some costs (which ultimately are paid by consumers), I am
reluctant to establish any requirements to cure a non-existent problem.
For this reason, at this time, I am inclined to forbear from applying
most of the specific rules we promulgate today to wireless carriers.

**SEPARATE STATEMENT OF COMMISSIONER MICHAEL K. POWELL, CONCURRING**

*Re: Report and Order and Further Notice of Proposed Rulemaking, In the
Matter of Truth-in-Billing and Billing Format (CC Docket No. 98-170).*

When we initiated this proceeding several months ago, I wrote separately
to express my firm support for the Commission taking steps to ensure
that customers have accurate, meaningful information in a format they
can understand. I underscored that the proper functioning of a
competitive market depends on consumers having such information. On
those bases, I was pleased that we had initiated this proceeding, just
as I am now pleased that we are taking additional steps in this *Order*
to address the egregious problems of slamming, cramming and related
consumer confusion. I also support our decision here that, to the extent
we impose requirements in this area, they will for the moment be broad
and flexible in form, so as to allow carriers to minimize compliance
costs and to differentiate their billing practices for competitive
purposes.

As a devout advocate of vigorous enforcement, I am convinced that the
government -- whether this agency, another federal agency or the states
-- can play a significant, beneficial role in protecting consumers from
demonstrable harms such as slamming, even in the context of competitive
telecommunications markets. Although policymakers may disagree about the
extent, form or timing of consumer protection efforts, I believe it is
entirely appropriate for government to become concerned if carriers
engage in abusive practices, particularly where competitive choices by
consumers and voluntary actions by the industry cannot effectively stem
such abuses.

**Some of These Requirements Seem Unnecessary or Ill-Suited to Achieve
Their Stated Purposes**

Regrettably, however, I am not fully convinced of the necessity or value
of some of the rules we adopt in this *Order.* I fail to understand, for
example, why we feel the need to require carriers to put their names on
bills when the carrier bills directly for its own services, a practice
that occurs among both wireline long distance companies and wireless
companies. Is there any factual or logical reason to think that a
carrier would send a bill to a consumer without indicating whom the
consumer should pay? It is difficult to dispute the value of such
information, but equally difficult to imagine the omission of such
information in a commercial enterprise, absent this federal requirement.

I am similarly troubled by our proposal to adopt uniform labels for line
items that carriers include on their bills to recover their
federally-mandated payments, such as access charges and contributions to
universal service. In contrast to the celebrated flexibility of most of
the requirements adopted in this *Order,* the Commission proposes to
require that specific words and phrases be used when a carrier chooses
to recover its government-mandated universal service and other charges
explicitly,[^256] as we allow them to do. The *Order* offers two
justifications for diverging from the reasonable flexibility it permits
with respect to the other rules, neither of which seems convincing.
[First]{.underline}, the *Order* states that the line item labeling
proposal will enable consumers to use the labels to "comparison shop"
among carriers, so as to obtain the best deal with respect to the
recovery of those federal mandates.[^257] Yet our rules also allow
carriers to recover their federal charges by burying the amounts passed
on to consumers in their interstate rates.[^258] Thus, even if we adopt
uniform labels for line items, consumers will remain powerless to
compare the manner in which carriers that use explicit line items to
recover their federal charges against carriers that essentially hide
such recovery in their other rates.

[Second]{.underline}, the *Order* states that the line item labeling
proposal will prevent such labels from becoming false or misleading. Yet
I fail to understand why, if the purpose of uniform line items is truly
to avoid false or misleading characterizations of these charges, the
Commission refuses to make clear that carriers may indicate that their
own contributions to universal service and other federal requirements
*are* mandatory, and that the Commission *allows* carriers to recover
the amounts associated with these requirements directly from consumers.
Although some may *prefer* that carriers simply conceal recovery of
their required contributions in their rates, it is beyond question that
the previous Commission *expressly allowed* carriers to do so, as we
recently acknowledged.[^259] In any event, I remain concerned that we
avoid formalisms and semantic hair-splitting regarding the extent to
which the Commission is or is not responsible for the appearance of
politically-unpopular line items on consumers bills. Carriers would not
be putting these line items on their bills if we were not requiring them
to pay the underlying charges or if we did not allow carriers to recover
these charges from end users. Thus, try as we might, we cannot escape
the fact that these line items do result, at bottom, from actions taken
by the government to preserve and advance universal service, and to
achieve other valid goals pursuant to the 1996 Act.

**The *Order* Relies on Flawed Premises Regarding the Role of
Competition in Consumer Protection**

But the strongest of my misgivings about this *Order* centers around the
flawed premises justifying our imposition of these requirements.
[First]{.underline}, these premises include faulty, poorly supported
assertions and implicit assumptions that competitive markets are
categorically and in all circumstances unable to protect consumers from
the types of harms we address in this *Order*.[^260]
[Second]{.underline}, I fear that these underlying premises, when
juxtaposed with Congress' mandate that the Commission eliminate and
forbear from unnecessary regulation, are either inconsistent with the
provisions and purposes of the 1996 Act or would require the Commission
to adopt requirements from which we will almost immediately forbear, a
result that I find nonsensical.

**Markets and Competitive Choice Provide the Most Fundamental Mechanisms
for Protecting Consumers**

It is axiomatic that one of the most important benefits of competition
is that it gives consumers the ability to change providers to obtain the
best rates, terms and conditions for their individual needs. As such,
competition *empowers* consumers to leave their provider and find
another if their current provider does not treat them fairly.
Furthermore, the threat of consumer churn and the related downward
pressure on profitability[^261] provides an important *in terrorem*
effect that encourages providers to do everything possible to avoid
losing customers to the competition, including avoiding inaccuracies and
misleading information in their bills. Simply put, the risk to providers
of engaging in fraudulent practices in a competitive market is that
consumers will soon discover these practices and cease to generate
revenues for those providers. Of course, some minority of providers may
choose, nonetheless, to misbehave in a competitive market in ways that
are not easily rectified through voluntary actions by the industry. It
is for this reason that, even in a competitive market, government
enforcement may be necessary to stop certain companies from continuing
to engage in harmful practices.

Despite these truisms of competition, the *Order* suggests in a number
of places that requirements like those we adopt here will *always* be
needed in *every* market, no matter how competitive.[^262] These
unsupported, blanket assertions are troubling for their unstated,
paternalistic judgment that consumers are ill-suited to protect
themselves even when they are empowered to escape harm by choosing a new
provider. Indeed, these assertions ignore the likelihood that market
forces may generally be *more* effective in eliminating harms to
consumers than government intervention. Recent events suggest that this
likelihood is indeed real. Several major carriers (including Ameritech,
Bell Atlantic and Bell South) have unveiled or will soon unveil
simplified new bills that will help them to retain customers and respond
to the competitive pressures imposed by billing innovations introduced
by new entrants.[^263] And these carriers are doing so for the most part
without government mandate. I agree that we should celebrate these
competitive benefits to consumers but, in the parlance of this item, it
would not be "truthful or non-misleading" to suggest that these actions
have resulted primarily from the actions of regulators. Rather, market
forces are largely responsible for the improvements we are seeing and
will continue to see.

Even worse, the *Order*'s assertions that government intervention is
always necessary to protect consumers ignore the clear evidence on the
record indicating that the problems of slamming, cramming and consumer
confusion may not be significant in certain telecommunications markets,
such as wireless, and among certain carriers, such as those that bill
consumers directly only for their own services. Although complaints on
these issues from wireline customers number in the tens of thousands
annually, for example, complaints from wireless customers number only in
the dozens -- an order of magnitude fewer even if one controls for the
smaller number of total wireless customers relative to wireline
customers. This record suggests that it is unnecessary to impose these
requirements on some carriers in order to ensure that consumers have
access to useful and accurate information.

**The *Order*'s Assertion That These Requirements Are Necessary in All
Circumstances is Inconsistent With the Act's Mandate That the Commission
Eliminate and Forbear From Unnecessary Regulation**

Given the record evidence that market or other factors appear to be
sufficient to protect consumers in some instances, the big question that
remains is: whether and to what extent companies will provide useful
information *voluntarily* or whether government *intervention* will
become necessary. Unlike some, I believe that Congress has already
answered that question for us. Specifically, Congress has commanded that
we look in the first instance to the market to determine what carriers
provide their customers, and only when it is clearly demonstrated that
the absence of regulation will harm consumers should we intervene.

The statute makes clear (through mandatory section 10 forbearance,
biennial review, and the "pro-competitive, de-regulatory national policy
framework" of the Act) that *Congress* has decided that markets should
replace regulation except where actually necessary to protect consumers
or to maintain just, reasonable and nondiscriminatory rates, terms and
conditions.[^264] As such, I feel strongly that we should only be
imposing new regulations -- however general or flexible -- where
necessary to correct well-supported, identifiable harms to consumers or
"just and reasonableness" problems. Thus, I can support the application
of these new requirements on certain wireline companies. I cannot,
however, support imposing these same conditions on CMRS providers.
Because CMRS carriers are excluded from equal access obligations, CMRS
customers are less likely to experience slamming with respect to that
service.[^265] Further, CMRS customers also are unlikely to experience
cramming with respect to that service, because CMRS carriers generally
only bill for their own services, thus making one of the requirements we
adopt here largely inapplicable.[^266] In addition, the record clearly
lacks substantial evidence that there are problems that need correcting
in the CMRS context, as the *Order* also concedes. Although there
appears to be some lack of clarity in how inquiries by CMRS customers
are categorized, there is a huge magnitude of difference in the number
of slamming, cramming and universal service complaints for wireless,
relative to wireline.

I also reject any notion that we should allow enforcement to degenerate
into imposing broadly rules with the understanding that we might forbear
in the future. If the Act means anything, it means that we should not
impose regulations just for the sake of uniformity or to enact some
grand regulatory plan. Sure, we could impose regulations and then wait
for parties to petition for forbearance, but why impose unneeded rules
just so we can remove them later? Notwithstanding these shortcomings, I
applaud the majority's thoughtful decision not to impose the requirement
adopted here regarding descriptions of billed charges on CMRS
carriers.[^267]

**Enforcement and Consumer Protection Should Not Provide an Excuse for
Additional Regulation**

Since taking office, I have spoken often about the importance, in
promoting competition and deregulation, of shifting regulatory resources
from drafting complex prophylactic rules to vigorous enforcement. The
term "enforcement," like "competition" itself, has taken a prominent
place in telecom regulatory rhetoric; no one would be caught dead saying
that they did not support strong enforcement. It's like Mom and apple
pie.

But we should be careful what we mean by enforcement. To be consistent
with the Act, enforcement cannot become a means of extending regulation,
a sort of "full employment" regulatory approach for an agency concerned
about making sure it continues to play an active role as we transition
to competitive markets. Rather, enforcement must be targeted so that
government intervenes -- only *when* and only to the *extent* -- the
record demonstrates that there are real, identifiable harms that the
market participants' voluntary actions will not correct.

It is critical to the process of regulators ceding control to the market
that enforcement not become a solution in search of a problem that has
not yet been *identified*. Neither should we suggest that we do not
*need* a problem to solve in order to justify imposing additional
regulatory burdens on market participants, simply because we believe
those requirements may benefit consumers. If such an unprincipled
approach were valid, there would be no limit to the requirements we
could impose on carriers in the name of consumer protection. Indeed, the
sad irony of imposing such unnecessary requirements is that doing so
would thwart Congress' directive that we use competitive markets and
deregulation to benefit consumers.

Having expressed these reservations, I look forward to working with my
colleagues to ensure that consumers have access to knowledge that will
truly help them make more informed buying decisions.

**DISSENTING STATEMENT OF**

**COMMISSIONER HAROLD FURCHTGOTT‑ROTH**

*Re:First report and Order and Further Notice of Proposed Rulemaking,
Truth-in-Billing and Billing Format; (CC Docket 98-170).*

I dissent from the adoption of this item and write separately to express
my many concerns about this agency\'s direct involvement in commercial
billing issues. I have deep reservations about the extent of the
Commission\'s authority over the commercial relationship between
carriers and their customers. In particular, I am not convinced that the
Commission possesses specific statutory authority to regulate a bill\'s
description of that commercial relationship, or even the truthfulness of
that communication. Apart from the question of statutory authority, I
also view this exercise as an unwise use of limited Commission
resources.

With particular respect to regulation of federal charges, I noted in the
original Notice of Proposed Rulemaking my apprehension that carriers
might be pressured, even indirectly, to remove or alter current line
items or charges. I also objected to any suggestion that carriers had
actually misrepresented any facts related to federal charges. Indeed, as
I have stated before, while the government does not require a particular
method of recovery, it has mandated payment of the underlying
contributions by the carriers.[^268] Regrettably, today\'s Order assumes
that some carriers have misrepresented facts on bills and that the
Commission thus must take prescriptive action to address those
misrepresentations. I disagree with the premise that any carrier has
acted to mislead its consumers.

In fact, it is this agency\'s attempt to distance itself from certain
federal charges that qualifies as misleading. Despite its best efforts,
the Commission cannot deny that the underlying charges to the carriers
are mandated by the federal government, even if the method of recovery
has not been regulated. A \"full and non-misleading\"
\"Truth-In-Billing\" Order would recognize the rights of carriers to
inform their customers that these charges are indeed federal
requirements adopted by the FCC, and that the Commission expressly
allows carriers to recover these charges directly from consumers. As
described below, it is this Commission\'s desire to hide that very fact
from consumers that has precipitated this \"Half-Truth in Billing\"
Order.

Regulation of descriptions for charges when there is nothing factually
inaccurate about the carriers\' statements \-- but their description
does not reflect the government\'s preferred explanation of the charges
\-- raises grave First Amendment questions. This Order\'s attempt to
regulate speech regarding the universal service charges involves, in my
view, censorship of speech integrally related to a political dispute
over social policy and taxation. Given the lack of clear statutory
authority to adopt these regulations, the prudent course would have been
to avoid \-- and not to create \-- these constitutional problems.

***I. The Legal Authority for These Billing Requirements Is
Questionable, And The Order\'s Underlying Assumptions Contradict The
Telecommunications Act\'s Deregulatory Mandate.***

I have serious questions about the extent of the Commission\'s legal
authority to regulate the commercial relationship between carriers and
their customers, as well as the wisdom of this use of limited Commission
resources. The majority relies in part on its authority under section
258 of the Act to adopt verification requirements to deter slamming. The
majority contends that these requirements are \"intended to function as
a critical component of the Commission\'s verification procedures.\"
*Supra* at para. 23. But the Commission only recently adopted
verification procedures, along with liability rules, that have only
recently started to take effect.[^269] Before enacting these additional
burdens on carriers, perhaps the Commission should have tried to
determine the adequacy of its existing verification requirements.

Moreover, as the majority acknowledges, the Commission has even less
statutory authority for the regulations regarding standardized federal
labels than it does for its verification rules. *Id.* at para. 21 (\"We
recognize, however, that the standardized label guideline rests
exclusively on our statutory authority under section 201(b) and
therefore is limited to interstate services.\") Section 201(b) simply
provides: \"All charges, practices, classifications, and regulations for
and in connection with such communication service, shall be just and
reasonable . . . .\" The majority explains that the \"principles and
guidelines established in this Order are intended to define more
specifically what would constitute a violation of section 201 in the
billing context for the covered carriers.\" *Supra* at para. 24. But
with regard to the various federal line items, it is not clear to me
that any of the cited line items or their corresponding charges are
either unjust or unreasonable.

For example, the majority states that carriers have labelled the fee
related to universal service as \"Universal Connectivity Charge,\"
\"Federal Universal Service Fee,\" \"Carrier Universal Service Charge,\"
and \"Local Service Subsidy.\" *Id.* at para. 51. The Commission does
not claim that any of these labels are inherently unjust or
unreasonable; indeed, it does not even claim that any of the labels in
the record are actually misleading. Neither does the Commission assert
that the corresponding charges, which have ranged from \$.93 per bill to
5% of the customers net interstate and international charges, are unjust
or unreasonable. Given the utter failure to find either the labels or
the charges \"unjust or unreasonable,\" it is difficult to see how the
regulations concerning standardized labels could be adopted since
section 201(b) is the sole source of authority cited by the Order.

In addition, I disagree with the premise of the Order that \"\[e\]ven in
competitive markets, . . . disclosure rules are needed to protect
consumers.\" *Id.* at para. 7; s*ee also* *id.* at para. 6 (\"\[A\]t
this time, competitive pressures alone do not ensure that consumers
receive clear, informative and consumer-friendly telephone bills from
certain carriers.\"). I do not believe that increased competition can
ever be the impetus for further regulatory action by this agency.
Indeed, Congress intended just the opposite. Both the Section 10
forbearance requirements and the Section 11 biennial review provisions
are founded on the assumption that as competition increases, the need
for regulation decreases.[^270] Through these and other provisions of
the 1996 Act, Congress made clear its intention that the Commission
remove regulations as competition develops. We are not supposed to
increase regulation in response to competition, as this Order does.

***II. This \"Truth-in-Billing\" Order is Internally Inconsistent,
Arbitrary, and Misleading.***

This Order is riddled with internal inconsistencies, arbitrary
distinctions, and misleading statements. For example, I am still
confused as to which billing requirements apply to wireless carriers and
which do not. These requirements, of course, are not a small matter. The
Order states that the \"*broad principles* that we adopt to promote
truth-in-billing should apply to all telecommunications carriers, *both
wireline and wireless.*\" *Supra* at para. 12 (emphasis added). The
majority explains that these \"principles\" apply to all carriers
because they \"represent fundamental statements of fair and reasonable
practices.\" *Id*. The majority concludes that \"\[l\]ike wireline
carriers, wireless carriers also should be fair, clear, and truthful in
their billing practices. Consumers deserve no less.\" *Id.* Thus, the
majority concludes that these principles are enforceable as just and
reasonable practices under section 201(b). *Supra* at para. 24 (\"The
principles and guidelines established in this Order are intended to
define more specifically what would constitute a violation of section
201(b) in the billing context for the covered carriers.\")

Comparison of the principles with the actual rules is an interesting
exercise. The Commission\'s second principle, clearly applicable to
wireless carriers, requires \"that bills contain full and non-misleading
descriptions of charges that appear therein.\" *Id.* at para. 5. The
rule implementing that principle, technically applicable only to
wireline carriers, requires that \"\[c\]harges contained on telephone
bills must be accompanied by a brief, clear, non-misleading, plain
language description of the service or services rendered.\" The
principle is, of course, virtually indistinguishable from the rule; it
is hard to see how the obligations could differ. But, wireless carriers
are expressly *exempted* from the rule. *See id.* at Appendix A
(\"\[R\]ule 64.2001(b) . . . shall not apply to providers of Commercial
Mobile Radio Service.\"). Is that some indication these obligations
should not, under any circumstances, apply to wireless providers? These
conflicting statements make it unclear whether the bills of wireless
providers must contain full and non-misleading descriptions, or not.
While full and non-misleading description are not required of wireless
providers under the rule itself, it appears that wireless carriers would
be in violation of a fundamental fair and reasonable practices if they
nonetheless failed to provide them. But if the descriptions are required
in any event, why has the Commission bothered to exempt wireless
carriers from the implementing regulation?

In short, when one compares the text of the \"principle\" with the text
of the \"rule\" based on that principle, it is clear that they are
almost identical. Yet, the majority apparently gives this distinction
some meaning, as it chooses to apply the principle to wireless carriers
but simultaneously exempts wireless carriers from the rule. At the same
time, the majority refuses to explain exactly what effect, if any, this
exemption will have. Are wireless carriers required to provide full and
non-misleading descriptions of charges on their bills or not? Can a
consumer file a complaint against a wireless carrier for failing to
provide such a description or not? *These are not unreasonable
questions, the answers to which should be readily apparent from a
\"clear and non-misleading\" FCC Order.* Wireless carriers, and their
consumers, are entitled to know what requirements are being placed on
them by this agency.

The only real distinction that I can discern between the principle
applicable to wireless carriers and the rule that exempts them is a
practical one relating to the proper pleading of a complaint against a
wireless carrier. A consumer who objects to a wireless carrier\'s
failure to include full and non-misleading descriptions of the charges
on his bill and who files a complaint under rule 64.2001(b) will be
denied relief. The same complaint filed against a wireless carrier as an
unreasonable practice pursuant to section 201(b)[^271], however, would
necessarily succeed, as the Commission has already determined that
including full and non-misleading descriptions of the charges on a bill
is \"fundamental to a carrier\'s obligation of reasonable charges and
practices.\" *Supra* at para. 37. The majority goes even further in
stating that \"we find it difficult to imagine any scenario where
payment could be lawfully demanded on the basis of inaccurate,
incomplete, or misleading information.\" *Id*.

Neither does this essentially ephemeral distinction between principles
and rules alter the burden of proof. The majority has already determined
that its billing principles are based on fundamental fairness and, as
such, always apply. How could the Commission allow wireless carriers to
fail to provide fair and reasonable practices? Could the Commission
decide that wireless consumers \"deserve less\" than \"fundamental\[ly\]
fair and reasonable practices?\" I doubt it. Would a defending wireless
carrier instead need to demonstrate that the provision of full and
non-misleading descriptions is not necessarily a fundamentally fair and
reasonable practice? If a carrier could ever make such a showing, then
the provision of \"full and non-misleading descriptions\" would not
always be necessary to maintain fair and reasonable practices. But the
majority\'s very justification for adopting these principles is that
they are \"fundamental principles of fairness to consumers and just and
reasonable practices by carriers.\" *Id.* at para. 5. Admitting that
such a showing could be made would thus undermine the justifications for
adopting the principles in the first place. By refusing to clarify that
such a complaint against wireless carriers must be accepted and instead
maintaining the exemption for wireless carriers, the Commission signals
that \-- at least in the wireless context \-- consumers indeed could
\"deserve less\" than \"fair, clear, and truthful . . . billing
practices.\" *Id.* at para. 12.

I am astonished that the majority would go to such extremes to exempt an
industry from a particular rule, while still requiring compliance with
an identical \"principle\" as a reasonable practice. For what purpose
are they making this distinction? The problem appears to be, in part,
the result of the Commission\'s vague use of the word \"principles\" to
describe specific requirements. Moreover, these \"principles\" are not
voluntary, but enforceable as fair practices under section 201(b).
*Supra* at n. 14. For all practical purposes, then, these principles are
rules of conduct, and materially indistinguishable from the actual rules
adopted.

I am left to conclude that this Order is more than just confusing due to
its internal inconsistencies; it is intentionally \"misleading,\" at
least to the extent that it implies that some of these requirements do
not actually apply to wireless carriers. Either that, or it has simply
failed to be \"full and non-misleading\" in informing wireless consumers
that their rights under section 201(b) have been diminished and that a
complaint alleging that a carrier has failed to conform to practices
that the Commission has declared fundamentally fair may be denied on its
face. Surely consumers, and all of the industries to which these
regulations apply, deserve more than the \"half truths\" and doublespeak
of this Order.

Similarly, it seems arbitrary for the majority to conclude that wireless
carriers should be subject to one of the rules implementing the second
principle \-- namely, that the requirement of standardized labels for
charges resulting from federal regulatory action, *supra* at para. 18
\-- while at the same time exempting them from the guideline/rule that
merely repeats the general principle. *Compare id.* at para. 18 *with*
Appendix A. If the general \"principle of full and non-misleading
descriptions also extends to carrier charges purportedly associated with
federal regulatory action,\" *id.* at para 49, and wireless carriers
must use standardized labels in the interest of \"full and
non-misleading descriptions,\" then how can the Commission
simultaneously exempt wireless carriers from rule 64.2001(b)\'s
implementing requirement that bills contain \"brief, clear,
non-misleading, plain language descriptions\"? Should not a carrier be
subject to a more general requirement before it is subject to a specific
rule implementing the requirement? Again, this Order is at best
\"confusing\" and at worst arbitrary in its application and
justification of its regulatory scheme.

Finally, I believe that this Order is \"misleading\" \-- and certainly
not \"full and non-misleading\" \-- in refusing to recognize the rights
of carriers to inform their customers that the underlying federal
charges are indeed federal requirements, mandated by the FCC. The
Commission expressly allows carriers to recover the amounts associated
with these charges directly from consumers. Despite its claims to the
contrary, the charges appearing on consumers\' bills *are* the result of
*this* agency\'s requirement that carriers \"contribute\" to the
universal service fund at a specified level. Recognizing our own role in
these charges, now appearing on consumers\' bills, would be the truly
\"non-misleading\" approach.

In sum, I can only conclude that the Commission has been arbitrary
either: (i) in the adoption of these requirements, since it refuses to
apply its understanding of \"fundamentally fair and reasonable
practices\" across the board to all carriers; or (ii) in the application
of its rules only to particular carriers, while requiring all other
carriers to abide by identical principles. Either way, it appears that
the Commission has acted arbitrarily and capriciously in adopting and
applying these binding principles and rules. Moreover, this Order is at
least as \"misleading\" and \"confusing\" as many of the charges and
practices about which the Commission complains. It is ironic indeed,
that this agency\'s \"truth-in-billing\" initiative could not even pass
its own standard for \"brief, clear, non-misleading, plain language
description\[s\]\" with regard to the regulations that it imposes.

***III. The History of the Universal Service Program and
\"Truth-In-Billing\"***

What disturbs me most about this Order are the Commission\'s underlying
motives for regulating carriers\' descriptions of federal charges:
namely, that the majority does not want to be associated with the taxes
they themselves have established, and that they are angry with carriers
who have informed consumers about the tax and the majority\'s
involvement with it. As one high ranking Commission official warned at
the time these taxes were originally imposed, \"Carriers better sharpen
their pencils and think twice about what they\'re putting on customers\'
bills and attributing to government action.\" *Some MCI Customers Seeing
Surge in Phone Bills*, Washington Post, January 31, 1998 at page H-3.

This story begins with the Commission\'s development of the schools and
libraries program. In a May 1997 Order, the Commission \"requir\[ed\]
phone companies \[to\] make . . .\[a universal service\]
\'contribution\' for the social good of wiring schools and libraries to
the internet. . . . \[T\]he companies will have to hand over \$2.25
billion in extra charges for the wiring cause.\" *New Phone Tax*, Wall
Street Journal, December 9, 1997.

In December of 1997, I first noted my concern that the Commission was
pressuring carriers not to place line-items for these charges on their
consumers\' bills.[^272] At the time, it was widely reported that the
\"Commission prefers that \[universal service costs\] be rolled into
rates,\"[^273] and that the FCC was irate with companies that planned to
pass this tax through to consumers:

The FCC is angry at companies that plan to disclose those costs to
customers as a line item on the monthly bill. \"They don\'t want us to
call it a tax,\" \[said one industry representative\]. \"But that\'s
what it is.\"

*A New Tax for the New Year*, The Washington Post, December 2, 1997.

I objected to the Commission\'s efforts to hide this tax from consumers,
making clear that \"I do not share such a preference or endorse such
efforts. . . . No carrier should have its billing information restricted
or limited by the Commission.\"[^274] Indeed, I believe that consumers
have a right to know when they are paying federal charges; the
Commission should not discourage companies from placing federal
universal service charges on their bills. Line items for new taxes are a
means of letting customers understand why rates are not lower than they
would have been absent the new taxes. These line items are not a means
of promoting \"hidden rate increases,\" as some have called it. To the
contrary, the only \"hidden rate increases\" here are those that result
from obscured and unexplained taxes.

For consumers, the issue is not just whether prices have gone up or
down. The question is whether prices would have been lower without the
new tax. Only in Washington could explicit disclosure of this new tax be
considered deceptive. Depriving consumers of information about new taxes
demoralizes a democratic society.

Despite the benefits of fully informing consumers about
government-mandated charges, \"\[t\]he administration, which has touted
the \[schools and libraries\] program as the centerpiece of President
Clinton\'s education goals, would rather that customers not know.\"
*Itemized list of phone fees hotly debated*, USA Today December 15, 1997
at B-12. So, it was reported, \"the FCC . . . had been pushing hard to
get major long-distance carriers to agree not to put line-item charges
on residential phone bills at least until July.\" *FCC Postpones Ruling
on Internet Connections*, Washington Post, December 13, 1997 at F-9.
These efforts were designed to \"mask \[the tax\] for a while, to take
some pressure off from the Hill.\" *Id*. For the first few months of the
program, the Commission even \"decided to reduce the \[initial universal
service\] charges after the carriers said the fee could lead to higher
rates and after AT&T and MCI threatened to specify the charge on the
bills they send to customers.\" *Fund to Aid Technology in Schools
Facing Big FCC Cuts*, New York Times, December 15, 1997 at D-1.
Apparently, \"the agency worried that if millions of Americans began
seeing such fees on their bills, popular support for deregulating the
telecommunications industry could begin to erode.\" *Id*. At this point,
most large carriers began to place the line items only on bills for
commercial customers, declining to specify the charges on bills for
residential customers.

Last spring, the general issue of line items for schools and libraries
\"contributions\" arose again when the Commission began to consider
raising the funding level for the schools and libraries program. By
then, many carriers had announced that they would recover these costs
through separate line items on individual consumers, such as residential
customers. Again, these announcements angered some at the Commission.
*See, e.g.*, *Statement of Chairman William E. Kennard on AT&T Long
Distance Announcement*, May 28, 1998 (\"AT&T\'s announcement is
premature, unwarranted and inconsistent with their own public proposals
to the FCC. This announcement suggests that AT&T will raise rates to pay
for universal service.\"); \"*AT&T adding surcharges; FCC Furious*,\"
USA Today, May 29, 1998 at 2 (\"The FCC is livid.\").[^275]

Immediately after carriers announced their intent to place line items on
residential bills, the Commission announced its plan to initiate the
instant \"truth-in-billing\" proceeding. *Schools, Libraries, Health
Care Discounts Program Faces More Scrutiny*, Washington Report, June 15,
1998 (Commissioners \"said they plan to adopt a notice of proposed
rulemaking to help clear up consumer confusion about new rates and fees
attributed to the discount programs\").

Even worse, in the view of some at the Commission, opponents of the tax
were blaming not just the Commission for the imposition new consumer
charges, but also the current Administration, which strongly supported
the schools and libraries program. As one news magazine reported:

\[The Vice President\'s\] biggest high-tech achievement to date is a
program to wire every classroom and library in the country. . . . But
right now the program is under assault from congress as an out of
control entitlement engineered by an out-of-control bureaucracy. Which
does not do much for Gore\'s reputation as the architect of reinventing
government. Even more ominous is another threat: starting this summer
phone companies that were ordered to pay for the program are threatening
to add a new charge to the long distance bills of residential consumers.
Critics are already calling it the Gore Tax.

TIME, Karen Tumulty & John Dickerson, *Gore\'s Costly High Wire Act*,at
52, May, 25 1998.[^276] Others even claimed the schools and libraries
program had been initiated in order to enhance the chances of possible
presidential candidates, arguing that it was

nothing less than a stealth campaign to enhance Gore\'s presidential
prospects. \"This was not to be a political cash-grant program so that
Al Gore can run for President, \[one Congressman\] complain\[ed\].\"

*Id*. at 55.

Toward the end of 1998, an investigation by the United States House of
Representatives confirmed the Commission\'s attempt to prevent carriers
from associating the federal government with these charges:

It is clear that the FCC pressured and threatened long distance carriers
in an inappropriate manner from taking action regarding how long
distance carriers would recover their contributions to universal service
from their telephone subscribers. The FCC was apparently motivated to
exert such pressure to fulfill the Administration\'s political agenda to
connect every classroom in the United States to the Internet by the Year
2000, and to do so while hiding the costs of their agenda from the
American public.

*Hill Report Finds FCC Threats, political Acts Against AT&T and MCI*,
Communications Daily, November 30, 1998.[^277]

At bottom, I fear that this agency has only decided to regulate the
description of federal charges because many carriers went \"against the
FCC\'s wishes and itemiz\[ed\] the phone tax.\" *New Phone Tax*, Wall
Street Journal, December 9, 1997. That is not a legitimate reason for
regulation, as either a policy matter or from a First Amendment
perspective. I turn to the First Amendment issues below.

***IV. The Standardized Labeling Requirements for Universal Service
Charges Raise Grave First Amendment Questions.***

I believe that the \"standardized labeling\" regulations for universal
service charges, in particular, raise serious questions under the First
Amendment. These regulations involve censorship of speech integrally
related to a political dispute over social policy and taxation. As such,
I believe they govern speech that is not merely commercial but political
as well, and that they are thus presumptively unconstitutional. In any
event, contrary to the Order\'s assertions, the standardized labeling
regulations do not pass muster under the test for regulation of purely
commercial speech.

A.

At the outset, some important facts must be clarified. The Commission
repeatedly emphasizes in this Order that it has \"not mandated or
limited specific language that carriers utilize to describe the nature
and purpose of \[universal service\] charges.\" *Supra* at para. at 56.
The Commission has done *precisely* that, however, with respect to the
labeling of the charges. It issues today a proposed list of acceptable
words for characterizing the charges on line items and presumably will
issue a final list in the future. *See supra* at para. 71. In addition,
this Order appears to prohibit any line items that indicate the charge
is federally-mandated or federally-imposed.[^278] Surely, this action
\"limit\[s\]\" the \"specific language\" that carriers may use when
speaking about the charges. Conversely, and by necessary implication,
the Commission bans all words other than those on the approved list,
including wholly truthful and non-misleading speech.

To be sure, the Commission will permit carriers to use additional
language to describe the charge (so long as that description is not
\"misleading,\" a limitation discussed below). But that does not erase
the fact of the restriction on permissible labels. As the Commission
acknowledges by its direct regulation of the line item as opposed to
other text on the bill, consumers tend more to focus on the line items
than on footnoted material at the bottom of the page.

Moreover, the Supreme Court has rejected the argument that limitations
on commercial speech are permissible just because the government leaves
open alternative modes of communication. *See Linmark Associates, Inc.
v. Township of Willingboro*, 431 U.S. 85, 93-94 (1977) (applying strict
scrutiny to ban on commercial speech notwithstanding fact that other
modes of communication were unaffected by the ban); *see also* *Elrod v.
Burns*, 427 U.S. 347, 373 (1976) (\"The loss of First Amendment
freedoms, for even minimal periods of time, unquestionably constitutes
irreparable injury.\"). The Court has also rejected the argument that
content-based restrictions \-- which these regulations undoubtedly are
\-- become permissible when speech alternatives exist. *See*
*Consolidated Edison Co. v. New York*, 447 U.S.530, 541 (1980) (\"\[W\]e
have consistently rejected the suggestion that a government may justify
a content‑based prohibition by showing that speakers have alternative
means of expression.\") (citing cases).

It is also plain from today\'s Order that any additional language that
carriers may wish to include must be \"non-misleading\" in the
Commission\'s eyes. *See supra* at para. 55. If the Commission believes
that it would be \"deceptive\" to tie the charge to the Commission or
the federal government, as it apparently does, then the companies have
been afforded no meaningful outlet at all. *See id.* (\"We would not
consider a description of \[the universal service\] charge as being
\'mandated\' by the Commission or the federal government to be
accurate.\"). It is undeniable, as a matter of fact, that the charge has
been \"mandated\" by the Commission. The only *possible* question could
be upon whom the Commission directly levied the charges. Thus, the
Commission\'s argument seems to hang on the slim reed that omission of
the fact that the charges were directly levied on carriers, as opposed
to being levied directly on consumers, is \"misleading\" in that it does
not expressly tie accountability for the charges to the carriers.
Indeed, it is not even clear from the face of this Order that carriers
could simply state that they were recovering from consumers charges
imposed upon them by the Commission \-- an entirely accurate statement,
even on the Commission\'s theory of the charges.

To my mind, the assignment of responsibility for these consumer charges
seems less a question of pure fact or \"truth\" than opinion. As with
most questions of opinion, it is one about which reasonable people can
disagree.[^279] Some carriers possess a reasonable belief that the
Commission, by levying a fee on carriers, was the \"but-for\" cause of
the appearance of these charges on consumers\' bills. In a competitive
market, they say, costs are by definition passed through to consumers,
and so the imposition of new regulatory charges on carriers is
tantamount to a charge on consumers. As long as the carriers are subject
to the Commission\'s understanding of \"misleading\" statements with
respect to the charges, however, they will presumably be forbidden by
this agency from expressing to consumers their view that the fees
imposed in connection with the universal service fund are the result of
government action and that ultimate responsibility for these charges
rests with the government. By choosing the very words that may be used
to label federal charges, these regulations \"attempt to give one side
of a debatable public question\" \-- here, the government view\'s about
who should be held responsible for these charges \-- \"an advantage in
expressing its view to the people.\" *City of Ladue v. Gilleo*, 512 U.S.
43, 50 (1994).

Indeed, given that carriers who highlight the charges must employ terms
that prevent them from disclaiming responsibility for the charges,
carriers have every incentive to omit the line-item altogether. Faced
with a choice between expressly identifying the charges on bills in the
government\'s terms and not raising the issue at all, carriers \"might
well conclude that, under these circumstances, the safe course is to
avoid controversy, thereby reducing the free flow of information and
ideas that the First Amendment seeks to promote.\" *Pacific Electric &
Gas Co. v. California*, 475 U.S. 1, 14 (1986) (internal citation and
quotation omitted). In this way, the regulations discourage speech about
the charges altogether.

In sum, these regulations undoubtedly constitute a limitation on the
speech that may appear on line items in bills: legally permissible
language is confined to that which appears on the Commission\'s list.
Conversely, these regulations prohibit all line-item speech regarding
the charges that does not appear on the list. While the Commission
loudly proclaims that carriers are \"free\" to provide descriptions of
the charges in addition to the standardized labels, it is clear that
those descriptions will be subject to rejection by the Commission on the
basis that they \"untruthfully\" point the finger of blame for the
charges at the federal government. Finally, given that speaking about
the charges on line items requires the use of the government\'s
terminology, the scheme deters carriers from speaking in the first
place. For the reasons that follow, this approach to the regulation of
carriers\' speech is in significant tension with the First Amendment.

B.

In this Order, the Commission applies the First Amendment test for
limitations on commercial speech first established in *Central
Hudson*.[^280] That test, however, has been further developed and
strengthened in subsequent cases. As I read commercial speech doctrine,
the regulations are of dubious validity.

1\.

\"It is well established that \'\[t\]he party seeking to uphold a
restriction on commercial speech carries the burden of justifying it.\'
\"*Edenfield v. Fane*, 507 U.S. 761, 770 (1993) (quoting *Bolger v.
Youngs Drug Products Corp*., 463 U.S. 60, 71 n. 20 (1983)).
Specifically, the government must \"*demonstrate* that the harms it
recites are *real* and that its restriction will *in fact* alleviate
them to a *material* degree.\" *Edenfield v. Fane*, 507 U.S. 761, 771
(1993) (emphasis added). The Supreme Court has expressly \"cautioned
that this requirement \[is\] critical; otherwise, \'\[government\] could
with ease restrict commercial speech in the service of other objectives
that could not themselves justify a burden on commercial expression.\"
*Rubin v. Coors Brewing Co.*, 514 U.S. 476, 487 (1995) (quoting
*Edenfield v. Fane,* 507 U.S. at 771)*.*

Here, there is no proof sufficient to meet the standard set in
*Edenfield*. To the contrary, this Order contains nothing more than
unsupported assertions of a theoretical link between the Commission\'s
action and its effect on the beliefs and resultant behavior of
consumers. Consider the entirety of the Order\'s reasoning on this
point:

The proposed regulation will ensure that the labels assigned to charges
related to federal regulatory action are consistent, understandable, and
do not confuse or mislead consumers. In addition, the regulatory scheme
will encourage carriers to provide consumers with information that will
enable them to understand their telecommunications bills, and prevent
carriers from misleading consumers into believing they cannot \"shop
around\" to find carriers that charge less for fees resulting from
federal regulatory action.

*Supra* at para. 61. This paragraph is composed of a string of
conclusions \-- not a demonstration of real harm or an explanation of
the ways in which the regulatory scheme will

actually and materially remedy that harm.[^281]

Specifically, where is the evidence that telephone customers will be
perplexed by a description of the charge as an FCC-mandated, or
federally-required, fee?[^282] (I suspect the American consumer would
understand this explanation all too well.) In fact, there is no record
that any carrier has even *used* such a label. *See id.* at para. 51.
What is the basis for the assertion that any confusion resulting from
the use of the banned labels would result in consumers\' belief that the
fee is nonvariable from company to company? Further, what proof is there
that any such belief that materialized in the minds of consumers would
prevent them from comparing long distance companies on the basis of
price? Finally, what proof is there that the agency\'s hand-picked words
will in fact, not just in theory \-- and materially \-- alleviate the
posited harm?

Moreover, the Order does not even attempt to tie these various
conclusions back to the \"ultimate goal\" of the regulation,
\"ensur\[ing\] that consumers pay fair and efficient rates.\" *Id.* at
para. 60. Even if one assumed the soundness of each of the foregoing
steps in the Commission\'s chain of logic, there is no explanation of
how unfair or inefficient prices for telephone service would result from
a consumer propensity not to shop on the basis of universal service
charges. Does the Commission intend to suggest that it is \"unfair\" for
consumers to pay rates that include these charges *in toto,* or that
such rates would be \"inefficient\"? The Commission cannot mean that,
however, because it expressly permits carriers to pass the charges on in
full. *See Federal-State joint Board on Universal Service*, 12 FCC Rcd
8776, 9209 (1997). Also, the prices charged by these long distance
carriers have been deregulated and are thus by definition efficient; the
Commission itself states that \"competition should ensure that \[these
charges\] are recovered in an appropriate manner.\" *Supra* at para. 54.
I cannot discern any connection in this Order between consumers\'
tendency to price shop on the basis of these charges and the ultimate
fairness of rates.

In short, there is no record to support any of the Commission\'s
suppositions regarding the way in which these regulations advance its
posited goal of fair and efficient prices. The notion of consumer
confusion from putatively misleading labels, and of the harms resulting
from any such confusion, is entirely conjectural. The idea that the
words selected by the Commission will cure that confusion is unfounded
by any empirical reality. Nor is there any nexus between the consumer
behavior that the Commission asserts will result from the use of certain
labels and the ultimate goal of ensuring fair prices.

As explained above, the \"direct advancement\" prong \"is not satisfied
by mere speculation or conjecture.\" *Edenfield v. Fane*, 507 U.S. at
770; *see also 44 Liquormart, Inc. v. Rhode Island*, 517 U.S. 484, 506
(1996) (lead opinion) (rejecting State\'s argument than ban on alcohol
price advertising advanced its interest in temperance because State
adduced \"no findings of fact, or indeed any evidentiary support
whatsoever\"); *Ibanez v. Florida*, 512 U.S. 136, 146 (1994) (\"If the
protections afforded commercial speech are to retain their force, we
cannot allow rote invocation of the words \'potentially misleading\' to
supplant the \[government\'s\] burden \[of proof\]\"); *Zauderer v.
Ohio*, 471 U.S. 626, 648 (1985) (rejecting State\'s asserted interest in
ban on illustrations in advertising by attorneys because \"\[t\]he
State\'s arguments amount to little more than unsupported assertions;
nowhere does the State cite any evidence or authority of any kind for
its contention\")*; Linmark Assoc., Inc. v. Willingboro*, 431 U.S. at
95-96 (holding that record did not support respondents\' \"fears\" that
certain behavior would result if speech were permitted and did not
confirm the \"assumption that proscribing\" speech would have the
government\'s presumed effect).

The standardized labeling regulations bear other inadequacies under the
\"direct advancement\" prong of *Central Hudson*. Close examination of
the entire scheme reveals that it is structured so as to preclude direct
advancement of the Commission\'s posited goal.

The Commission does not require line items for universal service
charges, even for carriers that choose to recover these charges from
end-users. Carriers who wish to include the entirety of these charges in
their general rates, without breaking them out separately, are free to
do so. *See supra* at para. 54 (carriers may decide \"whether to include
these charges as part of their rates, or to list the charges in separate
line items\"). Carriers who take this approach, however, would be just
as able to \"mislead\" consumers into deciding not to shop around for
providers that absorb more of the cost of the charges; their customers
will *never know* that the charges are being passed on to them.
Likewise, there would be no way for these customers to contrast the cost
of these charges with those imposed by other carriers, since their bills
would not specify the amount of the charges *at all*. If the Commission
truly means to further uniformity and accuracy with respect to universal
service charges so that consumers can compare the charges across bills
and shop on that basis, then it makes no sense to permit carriers to
conceal the charges in their general rates. This critical aspect of the
regulations \"directly undermine\[s\] and counteract\[s\] \[the\] effect
of\" the entire scheme. *Rubin v. Coors Brewing Co.*, 514 U.S. at 489.

Functionally, the lack of a requirement that carriers break out
universal service charges in a separate line item allows any carrier
that wishes to opt out of the labeling scheme. To qualify for this
wholesale exemption, carriers must simply encompass the charges in
overall rates. There is no requirement of disclosure regarding the
existence or nature of the charges for carriers who elect this course,
and there is nothing in the regulations that would prevent all carriers
from doing so. As a general matter, broad exceptions that appear
unrelated to the government\'s asserted interest create serious
obstacles to an affirmative finding under the \"direct advancement\"
prong. *See, e.g., Rubin v. Coors Brewing Co.*, 514 U.S. at 488 (holding
that exceptions to labeling ban on malt beverage alcohol content for
other kinds of alcohol rendered scheme irrational); *Valley Broadcasting
v. FCC,* 107 F.3d 1328, 1334 (9th Cir. 1997) (holding that exceptions to
casino advertising ban for other kinds of gambling undermined purpose of
ban). It could easily be argued that this functional exception, which
could easily swallow the rule itself, renders the regulatory support for
the Commission\'s purposes \"ineffective \[and\] remote.\" *Edenfield v.
Fane*, 507 U.S. at 769.[^283]

In the specific context of potentially misleading speech, the law also
requires that \"the record indicate\[\] that a particular form or method
of advertising has in fact been deceptive\" before it can be regulated
consistent with the First Amendment. *In re R.M.J.*, 455 U.S. 191 (1982)
(citing *Bates v. State Bar of Arizona*, 433 U.S. 350 (1977)). As
explained above, there is no record proof that the use of labels such as
\"FCC-mandated\" or \"governmentally-required\" has actually caused
consumers to be misled into thinking that the amount of universal
service fees charged to them was set by law. I am not aware of any
instance of such labels actually being used \-- and the Order certainly
does not point to any \-- and thus it hard to see what evidence there
could be of actual deception. In contrast to other commercial speech
cases, the record before us contains no \"substantial and
well-demonstrated\" practice of misuse of certain titles for the
charges. *Friedman v. Rogers*, 440 U.S. 1, 15 (1979).

For these reasons, I do not think that it can be said that the
government has carried its burden of showing that these regulations will
directly and materially advance the goal of ensuring that consumers will
engage in price comparison on the basis of universal service charges
among telephone carriers. Accordingly, the regulations appear vulnerable
to invalidation by a reviewing court on this ground alone.[^284]

2\.

Since *Central Hudson,* the Supreme Court has also expanded upon the
fourth prong of commercial speech analysis, the question whether the
regulation is more extensive than necessary to serve the asserted
interest. In *City of Cincinnati v. Discovery Network, Inc.*, the Court
explained that although \"\[a\] regulation need not be \'absolutely the
least severe that will achieve the desired end,\' . . . if there are
numerous and obvious less‑burdensome alternatives to the restriction on
commercial speech, that is certainly a relevant consideration in
determining whether the \"fit\" between ends and means is reasonable.\"
507 U.S. 410, 417 n. 13 (1993) (quoting *Board of Trustees v. Fox*, 492
U.S. 469, 480 (1989)).[^285] Recently, the D.C. Circuit extended the
strict evidentiary standard of *Edenfield v. Fane*, which dealt with the
\"direct advancement prong,\" to this fourth and final prong. *See
Pearson v. Shalala*, 164 F.3d 650, 659 n. 9 (1999) (\"\[W\]e see no
reason why the government\'s evidentiary burden at the final step of
*Central Hudson* should be any less than at the direct advancement
step.\").

The standardized labeling regulations are susceptible to constitutional
doubt under this last part of *Central Hudson* as well. In arguing that
these regulations are narrowly tailored, the Commission asserts:
\"\[W\]e only prescribe that these charges be presented using a
standardized label.\" *Supra* at para. at 62. This characterization
overlooks entirely the burdens on speech imposed by the regulations.
*See generally* Part IV. A. The regulations mandate not just
standardization, as the Commission claims, but require carriers to use
government-approved adjectives and nouns to characterize the charges in
line items. By necessary implication, the regulations outlaw the use on
line items of any and all other words, including accurate ones.
Additional language that carriers include elsewhere on bills to explain
the charges are subject to the Commission\'s limitation on
\"misleading\" statements. Contrary to the assertion of the Order, the
regulations clearly \"limit\[\] specific language that carriers utilize
to describe the nature and purpose of the charges.\" *Id.*[^286] In
terms of their impact on speech, the regulations are quite broad.

Yet, if ensuring that consumers can compare universal service charges
across bills is the goal here, that aim could be fully achieved by a
rule requiring standardization and nothing more. For instance, industry
could agree to a certain phrase, and the Commission could simply require
or encourage uniform usage of that phrase. Indeed, the Commission takes
just that sort of non-interventionist approach to speech with respect to
charges for services rendered. *See supra* at para. 42 (\"Although we
decline to formulate standardized descriptions, we encourage carriers to
develop uniform terminology. . . We believe industry is better equipped
than the Commission to develop . . . standardized descriptions that are
compatible with the character limitations for text messages and other
operational restrictions. . . .\").[^287] Given the stated goal of price
comparison, there is no ostensible reason \-- other than suppression of
the point of view that the charge is a federal fee or even tax for which
the government should be held accountable \-- that the Commission itself
would need to select or approve the words that can be used to describe
universal service charges. That extra step is simply not necessary to
serve the putative goal of uniformity.

To the extent that the Commission is concerned that certain
characterizations of the charges (specifically, those suggesting the
charges are required by the government) will in fact \"mislead\"
consumers into the decision not to price shop, the regulations are more
burdensome than necessary to serve that goal as well. Instead of
forbidding all speech except that which appears on its final list, the
Commission could have allowed carriers to speak but prohibited
misleading statements; that is, the presumption could have been in favor
of speech, not against it. Case-by-case adjudication of the
\"truthfulness\" of specific phrases used to describe the charges would
be vastly less intrusive than the expansive, prophylactic rules adopted
in today. The Commission\'s selection of a particular label or labels
necessarily excludes a vast category of entirely truthful, nonmisleading
ways of describing the charges on line items. *See generally Pearson v.
Shalala*, 164 F.3d at 655 (explaining that government \"may not place an
absolute prohibition on \... potentially misleading information \... if
the information also may be presented in a way that is not deceptive\")
(citing *In re R.M.J*., 455 U.S. 191, 203 (1982)); *see also Zauderer v.
Office of Disciplinary Counsel of the Supreme Court of Ohio*, 471 U.S.
at 648‑649 (holding that State\'s \"unsupported assertions\" were
insufficient to justify prohibition on attorney advertising and that
\"broad prophylactic rules may not be so lightly justified if the
protections afforded commercial speech are to retain their force\").

In addition, the Commission has chosen to suppress speech instead of
permitting the carriers to cure whatever confusion might be created by a
label such as \"federally-imposed\" with more detailed disclosures
regarding the nature and purpose of the fee. *See supra* at para. 59
(expressly \"declin\[ing\] to specify any periodic notification to
consumers providing additional explanation of any charges resulting from
federal regulatory action\" because \"requiring standard labels\" was
sufficient action). As the D.C. Circuit has ruled, however, \"\[i\]t is
clear . . . that when government chooses a policy of suppression over
disclosure ‑‑ at least where there is no showing that disclosure would
not suffice to cure misleadingness ‑‑ government disregards a \'far less
restrictive\' means.\" *Pearson v. Shalala,* 164 F.3d at 658 Even
assuming that it is potentially \"misleading\" to apply the words
\"FCC-mandated\" to universal service charges on a line item, that would
seem remediable by inclusion in the bill of a more complete explanation
of the technical details of the charges. And the Commission cannot
justify its rejection of disclosure on the grounds that it has already
adopted the more restrictive approach; rather, the Commission must
explain why requiring such periodic notification would not suffice to
cure the alleged problem of misleadingness. Requiring more speech about
the nature of the charges, instead of banning even potentially
misleading short-hand names for them, is \"a far less restrictive
means\" of combatting consumer \"confusion\" over the variability of the
charges as among carriers.

Moreover, the direct approach of regulating the underlying conduct \--
as opposed to the indirect approach of regulating speech about the
conduct \-- is also presumably available to the Commission. If the
Commission believes that the cost of the universal service program
should be borne by carriers alone, or that any charges that are passed
on should be allocated equitably, then it could (assuming statutory
authority) have regulated carriers\' recovery of the cost of these
charges. *Cf. 44 Liquormart v. Rhode Island*, 517 U.S. at 507 (holding
that State failed to \"satisfy the requirement that its restriction on
speech be no more extensive than necessary\" because \"higher prices can
be maintained . . . by direct regulation\"). But the Commission has
expressly declined to regulate recovery of the charges, *see supra* at
para. 49 (\"\[W\]e decline . . . to limit the manner in which carriers
recover these costs of doing business\"), choosing instead to suppress
speech regarding liability for the charges. Under the First Amendment,
that is a highly problematic approach. *See generally 44 Liquormart v.
Rhode Island*, 517 U.S. at 512 (\"The First Amendment directs that
government may not suppress *speech* as easily as it may suppress
*conduct,* and that speech restrictions cannot be treated as simply
another means that the government may use to achieve its ends\")
(emphasis added); *see also id.* at 520 (Thomas, J., concurring) (noting
emphasis in modern commercial speech caselaw on \"the dangers of
permitting the government to do covertly what it might not have been
able to muster the political support to do openly\").

Finally, the Commission could have issued public notices or bulletins to
increase public awareness of the nature of the charges. It could have
explained publicly its view that universal service charges are imposed
directly on carriers, that transfer of the costs to consumers is a
\"business choice\" for carriers, and that consumers should use this
information in evaluating carriers. *Cf. id.* at 507 (suggesting that
public educational campaigns to combat the posited problem are less
restrictive alternatives to speech restrictions); *see also id.* (citing
*Linmark* for proposition that \"State \[could\] use . . .
counter-speech, rather than speech restrictions, to advance its
interests\"). On this record, there is no reason to think that such a
educational campaign would be any less effective in terms of its impact
on consumers\' tendency to engage in price comparison than the scheme
adopted in these regulations.

For the above reasons, the labeling regulations impinge on speech to a
greater extent than needed to advance either the goal of uniformity or
of deception, much less the \"ultimate\" goal of efficient and fair
prices.

C.

While the regulations are highly questionable under commercial speech
doctrine, I would dispute the characterization of the speech at issue as
purely commercial. As the Court and individual Justices have repeatedly
recognized, the commercial is often intertwined with the political.
*See, e.g., Virginia State Board of Pharmacy v. Virginia Citizens
Consumer Council, Inc.,* 425 U.S. 748, 765 (1976) (explaining that
unless consumers are informed about the operation of commercial markets,
they cannot establish \"intelligent opinions as to how that system ought
to be regulated or altered\")*; 44 Liquormart, Inc. v. Rhode Island*,
517 US at 520 (Thomas J., concurring) (observing that \"\[i\]n case
after case. . . the Court . . . \[has\]. . . stress\[ed\] . . . the near
impossibility of severing \'commercial speech\' from speech necessary to
democratic decisionmaking\"). Although the majority struggles to contain
the carriers\' speech to the commercial category, I submit that speech
about the nature and purpose of universal service charges is intensely
political.

The facts of this case involve language on a telephone bill and thus, at
first blush, might be considered purely commercial. But if one looks
closer, it becomes clear that this speech does far \"more than propose a
commercial transaction.\" *Pittsburgh Press Co. v. Human Relations
Comm\'n*, 413 U.S. 376, 385 (1973). Nor does it constitute \"expression
related solely to the economic interests of the speaker and its
audience.\" *Central Hudson*, 447 U.S. at 561. Rather, the speech at
issue \-- brief descriptions of the origin and purpose of universal
service charges \-- attempts to identify to the consumer the cause and
intended use of these charges. Accountability for charges that some
consider a tax is not just a business matter, but a highly political
one. Neither the government nor the telephone industry wants to be
viewed by the public as the perpetrator or beneficiary of these new
federally-related charges: for carriers it may be bad public relations,
but for government officials it is bad politics. Few politicians welcome
the opportunity to be associated with a new tax.[^288]

The speech at issue may also involve explicit or implicit criticism of
the charges by carriers. It may certainly trigger explicit, even
vehement, criticism of the charges and the programs that they support by
consumers.[^289] Surely, discussion about the \"true\" nature of these
charges \-- whether on a carrier\'s bill or editorial page \--
constitutes discussion of a public issue. As the Supreme Court has made
clear: \"There is no question that speech critical of the exercise of
the \[government\'s\] power lies at the very center of the First
Amendment.\" *Gentile v. Nevada*, 501 U.S. 1030, 1033 (1991).

The nub of these regulations is whether it is \"misleading\" for
carriers to say that universal service charges are \"FCC-mandated,\"
\"federally-imposed,\" or even that they are simply recovering charges
imposed on them by the FCC. With respect to the breadth of the
Commission\'s prohibition on \"misleading\" speech, the General Counsel
of this agency stated publicly that carriers would be flatly prohibited
from describing the charges (even uniformly) as \"politician X\'s tax.\"
*Commission Public Meeting*, April 15, 1999. This strikes me as a
stunning limitation, from a First Amendment perspective. Referring to a
fee, program, or tax as the creation of a particular government
official, agency, or entity \-- whether to claim credit or cast blame
\-- is not merely commercial speech. Such references involve core
political expression.

Admittedly, the government can regulate the truth of facts in
advertising. But, as suggested above, these regulations do not concern
the accuracy of an objective, readily verifiable fact, one of the
original justifications for regulation of commercial speech. *See*
*Virginia Pharmacy Bd.*, 425 U.S. at 771 &. n. 24. Rather, these
regulations involve politically charged speech, *i.e.* statements
indicating who should be held responsible for the imposition of this
charge on the American telephone consumer. Government assessment of the
\"truth\" regarding its own responsibility for consumer charges is
entirely different than government assessment of the accuracy of, say, a
third party\'s interest rate quotation.[^290] The incentives for
governmental self-dealing and self-protection in the former case, at the
expense of free speech about government activity, are obvious.

For the foregoing reasons, I do not believe that this Order
\"involv\[es\] *only* commercial speech.\" *Central Hudson v. New York*,
447 U.S. at 562 n. 5 (emphasis added). To the contrary, the speech
governed by the labeling rules involves questions of governmental
accountability for charges used to support federal programs. It thus
\"extends well beyond speech that proposes a business transaction . . .
and includes the kind of discussion of \'matters of public concern\'
that the First Amendment both fully protects and implicitly
encourages.\" *Pacific Electric & Gas Co. v. California*, 475 U.S. at 8
(citation omitted).

Accordingly, strict scrutiny \-- rather than the more lenient scrutiny
of *Central Hudson* \-- might well apply to these regulations. Under
that standard of review, it is doubtful that these regulations would
survive judicial review. *See, e.g., Pacific Gas & Electric Co. v.
California*, 475 U.S. 1 (holding that State could not require private
company to include in its bills messages with which it disagreed);
*Consolidated Edison Co. v. New York*, 447 U.S. 530 (holding that State
could not forbid private company from including in its bills inserts
discussing issues of public policy).

D.

To sum up, I doubt that these regulations could survive either the third
or fourth prong of *Central Hudson*. The Commission has not shown that
the posited harms of consumer misunderstanding about the mandatory
nature of the charges, and the purportedly consequent decision not to
price shop, are real; that these harms have any causal connection to the
goal of fair prices; and that regulation of the uniformity and
truthfulness of descriptions of universal service charges will actually
and materially advance that goal. Moreover, the Order\'s yawning
loophole, which affords carriers the ability to opt out of the labelling
rules altogether by not mentioning the charges on bills while still
recovering the costs in per-minute rates, severely undermines the goal
of allowing consumers to compare universal services charges. Worse, it
has the effect of encouraging carriers not to speak about the charges in
the first place. Finally, numerous and obvious alternatives to these
sweeping, preventative speech restrictions exist.

Assuming for the sake of argument that these regulations are permissible
under the *Central Hudson* test, I do not think that the speech governed
by these rules can be made to fit in the \"commercial\" box. The
regulated messages, which go to public accountability for these charges,
are fraught with political significance. It is entirely possible, if not
likely, that these regulations enjoy the full constitutional protections
afforded speech regarding public issues. If that protection obtains,
these regulations are presumptively violative of the First
Amendment.[^291]

The Supreme Court has explained that \"the First Amendment directs us to
be skeptical of regulations that seek to keep people in the dark for
what the government perceives to be their own good.\" *44 Liquormart v.
Rhode Island*, 517 U.S. at 503. We should be even *more* skeptical of
the instant regulations: here, the government seeks to keep people in
the dark not for their own good, but to protect its own vested
interests. Governmental self-insulation from public criticism and
accountability, by regulation of the \"misleading\" nature of private
speech that seeks to attach responsibility for certain developments to
the government, is antithetical to the values embodied in the First
Amendment.

[^1]:     ^?^ Telecommunications Act of 1996, Pub. L. No. 104-104, 110
    Stat. 56 (1996).

[^2]:     ^?^ The principal goal of the Act is to \"provide for a
    pro-competitive, deregulatory national policy framework designed to
    accelerate rapidly private sector deployment of advanced
    telecommunications and information technologies and services to all
    Americans by opening all telecommunications markets to
    competition.\" *See* Joint Statement of Managers, S. Conf. Rep. No.
    104-230, 104th Cong., 2d Sess. Preamble (1996) (Joint Explanatory
    Statement).

[^3]:     ^?^ *See, e.g.,* NCL comments at 2-3 (noting that unscrupulous
    companies take advantage of consumer confusion over phone bills, and
    that fraud is increasing).

[^4]:     ^?^ Slamming occurs when a company changes a subscriber\'s
    carrier selection without that subscriber\'s knowledge or explicit
    authorization. Cramming refers to the practice of causing
    unauthorized, misleading, or deceptive charges to be placed on
    consumers\' telephone bills. *Notice*, 13 FCC Rcd at 18177-78. In
    1998, our Common Carrier Bureau Enforcement Division processed
    20,154 complaints of slamming and 4,558 complaints of cramming. We
    received 8,761 slamming complaints in 1995, 12,795 in 1996, and
    20,475 in 1997. Prior to 1998, the Commission did not track cramming
    complaints. Consumer Complaints and Inquiries, Consumer Protection
    Branch, Enforcement Division, Common Carrier Bureau, Federal
    Communications Commission (Oct. 31, 1998). The Federal Trade
    Commission (FTC) states it received 9,000 cramming complaints in the
    12 month period prior to filing its comments in this proceeding. FTC
    comments at 5. State commissions also have received thousands of
    complaints. *See, e.g.,* Vermont comments at 8.

[^5]:     ^?^ *Truth-in-Billing and Billing Format*, Notice of Proposed
    Rulemaking, CC Docket No. 98-170, 13 FCC Rcd 18176 (1998).

[^6]:     ^?^ *See, e.g.,* Missouri Commission comments at 5 (statistics
    of National Fraud Information Center show use phone bill is a
    \"preferred\" method for \"con artists\" seeking to defraud
    consumers). *See also* TCA comments at 2 (telecommunications fraud
    \"a growth industry\" in Texas); Georgia comments at 2 (complaints
    of slamming and cramming far outnumber all other types of
    telecommunications complaints Georgia receives); NYCPB comments at 5
    (companies engaged in cramming rely on consumer confusion over bills
    to encourage consumers to pay for services that they have not
    authorized); FTC comments at 3, 6 (unclear telephone bills have led
    to a proliferation of cramming, and LEC anti-cramming voluntary
    guidelines do not obviate the need for additional consumer
    safeguards); CompTel comments at 3 (confusing and unclear local
    telephone bills create opportunity for unscrupulous carriers to take
    advantage of consumers).

[^7]:     ^?^ *See, e.g.,* Vermont Commission comments at 8 (state and
    federal regulators have received \"literally thousands\" of
    complaints and inquiries suggesting many consumers are confused
    about the nature of charges contained on their telephone bills);
    TOPC comments at 3 (sixty percent of the calls that agency receives
    involve complaints about telephone billing); Bills Project comments
    at 1 (due to the \"complexity and inscrutability of consumers\'
    bills\" many billing errors brought to Bills Project\'s attention
    went undetected for significant periods of time before consumers
    noticed them and complained).

[^8]:     ^?^ NASUCA notes that, when fraud is discovered, consumers
    remain greatly disadvantaged when disputing unauthorized charges
    because bills often lack vital information, such as the name,
    address, and telephone number of the service provider. NASUCA
    comments at 9.

[^9]:     ^?^ *See, e.g.*, USTA comments at 5; Qwest comments at 6-7
    (discussing \"legacy\" billing systems). \"Legacy\" system refers to
    a non-standard or proprietary, typically older, computer system that
    cannot easily be upgraded and is incompatible with other computer
    systems. The breakup of the Bell System is described in *United
    States v. Western Elec. Co.*, 569 F. Supp. 1057 (D.D.C. 1983),
    *aff\'d sub nom. California v. United States*, 464 U.S. 1013 (1983).

[^10]:     ^?^ *See, e.g.,* Small Business comments at 1-2; NCL comments
    at 2; NAAG comments at 3; Bills Project comments at 1-2; West
    Virginia Commission comments at 1; Vermont Commission comments at
    3-4; Washington Commission Staff comments at 2; California
    Commission comments at 2; Maine Commission comments at 2; Minnesota
    OAG comments at 4; TCA comments at 2 (absent billing and formatting
    reforms, consumers will remain unable to discern legitimate services
    and charges from fraudulent cramming and slamming); UCAN comments at
    1-3; NASUCA comments at 7-8. *See also* NYCPB comments at 3, 6
    (favoring non-binding guidelines); Missouri Commission comments at 2
    (same); Florida Commission comments at 4 (Commission should act as
    national forum and adopt model procedures which states can use to
    develop their own truth-in-billing rules).

[^11]:     ^?^ FTC comments at 3.

[^12]:     ^?^ *See, e.g.,* *Cramming: An Emerging Telephone Billing
    Fraud, Hearing Before the Permanent Subcommittee on Investigations
    of the Senate Committee on Governmental Affairs*, S. Hrg. 105-646,
    105th Cong., 2d. Sess. (1998) (opening statements).

[^13]:     ^?^ State commissions and the FTC also have received
    thousands of complaints. *See, e.g.,* FTC comments at 5; Vermont
    Commission comments at 8. *See also* NASUCA reply at 2 (complaints
    received by FCC represent \"tip of the iceberg\").

[^14]:     ^?^ 47 U.S.C. § 201(b) (common carrier practices and charges
    must be \"just and reasonable\").

[^15]:     ^?^ *See, e.g., Local Competition*, Industry Analysis
    Division, Common Carrier Bureau, Federal Communications Commission
    (Dec. 1998) at 9.

[^16]:     ^?^ Our principles and guidelines are broad enough to allow
    carriers to continue to differentiate themselves from their
    competitors based on their billing practices, and accordingly, we
    disagree with GTE and ALTS, who argue that truth-in-billing
    requirements could take away the competitive edge of carriers who
    already possess consumer-friendly bills. *See, e.g.,* GTE comments
    at 9; ALTS comments at 5.

[^17]:     ^?^ TOPC reply at 3. Because mature markets also require
    disclosure rules, we disagree with ALTS\' argument that any
    confusion over billing formats that exists today is merely the
    result of the transition to fully competitive telecommunications
    markets. *See* ALTS comments at 3.

[^18]:     ^?^ We note that, to some degree, it is significantly
    *easier* to bill fraudulent charges on telephone bills than on
    credit card bills. While credit card charges require access to a
    customer account number that consumers understand should be treated
    confidentially, all that is often required to get a charge billed on
    a local telephone bill is the consumer\'s telephone number. This
    number is not only expected to be widely distributed, but can easily
    be \"captured\" by an entity even when the consumer has not
    authorized charges or made a purchase. *See Policies and Rules
    Governing Interstate Pay-Per-Call and Other Information Services
    Pursuant to the Telecommunications Act of 1996*, Order and Notice of
    Proposed Rulemaking, CC Docket No. 96-146, 11 FCC Rcd 14738, 14741
    (1996) (noting that automatic number identification has been used to
    charge telephone subscribers for calls to toll-free numbers).

[^19]:     ^?^ *See, e.g.*, TILA, 15 U.S.C. 1601, *et seq*., 12 C.F.R. §
    226. Congress passed TILA to ensure that consumers are given
    meaningful information about credit transactions and to create
    important protections for consumers using credit card billing and
    collections systems. FTC comments at 4-5.

[^20]:     ^?^ 15 U.S.C. § 1601.

[^21]:     ^?^ States and consumer groups are generally supportive of
    our efforts. *See, e.g.,* Small Business comments at 1-2; Bills
    Project comments at 1-2; NCL comments at 2; West Virginia Commission
    comments at 1; Vermont Commission comments at 1-2; Washington
    Commission Staff comments at 2; NAAG comments at 3; California
    Commission comments at 2; Maine Commission comments at 2; Minnesota
    OAG comments at 4; TCA comments at 2. *See also* NYCPB comments at
    3, 6 (supporting voluntary guidelines); Missouri Commission comments
    at 2 (same); Florida Commission comments at 4 (urging this
    Commission to issue model rules for states to enact). Most carriers
    oppose rules, but state that, if the Commission determines to act,
    we should do so in the form of broad guidelines that carriers may
    comply with in a number of different ways. *See, e.g.,* USTA
    comments at 3, 8; TRA comments at 3; U S West comments at 5.

[^22]:     ^?^ *See, e.g.,* NASUCA comments at 21.

[^23]:     ^?^ ALTS comments at 7; MCI comments at 4.

[^24]:     ^?^ *See, e.g.,* GTE comments at 9; ALTS comments at 5. We
    also find that this flexibility addresses the concerns expressed by
    CompTel that adoption of rules could make bills longer and more
    complex. CompTel comments at 6. Concise bills are more likely, not
    less likely, to comport with our principles that bills be clear and
    understandable because excessively long bills may confuse consumers.

[^25]:     ^?^NYCPB comments at 7 n. 3.

[^26]:     ^?^ *See, e.g.,* Ameritech comments at 13; BellSouth comments
    at 4; SBC comments at 4 (all noting that their bills already
    segregate charges by service provider).

[^27]:     ^?^ Several wireless industry commenters provided specific
    cost estimates, but only for implementation of proposals mentioned
    in the *Notice*, such as requiring separate status pages, that we do
    not adopt. *See e.g.,* GTE comments at 11 (cost of mailing an
    additional page of wireless bill would add \$9.6 million per year);
    BellSouth comments at 15 (one additional page on wireless bill would
    cost between \$500,000 and \$1 million for programming costs,
    resulting in 7 cent per customer per month charge); Bell Atlantic
    Mobile reply at 8 (\$5 million in systems development work to add
    separate page to highlight any changes form prior billing period and
    to provide a visual separation of difference services organized by
    provider.)

[^28]:     ^?^ In fact, according to telecommunications consulting firm
    Detecon, although telephone bill format rules might cause carrier
    costs to increase in the short term, our rules ultimately may reduce
    carriers\' costs. Detecon contends that costs incurred by carriers
    to implement our rules ultimately will be offset by cost savings
    resulting from quicker collection of revenues, because bills issued
    pursuant to rules requiring clear telephone bill formats are less
    likely to be disputed. This will reduce the amount of calls to
    customer service representatives, resulting in lower staffing costs.
    Detecon comments at 2.

[^29]:     ^?^ *See, e.g.,* C&W comments at 3; AT&T comments at 4-5; TRA
    comments at 5; MCI comments at 5 (rules should apply only to bills
    rendered by LECs and not to IXC direct billing).

[^30]:     ^?^ *See* 47 C.F.R. § 20.9 (enumerating classes of CMRS
    providers). Requirements established for CMRS in this order apply
    similarly to providers of mobile services, as defined in Section
    20.7 of the Commission\'s rules, that are regulated as
    telecommunications common carriers.

[^31]:     ^?^ *See Implementation of the Subscriber Carrier Selection
    Changes Provision of the Telecommunications Act of 1996 and Policies
    and Rules Concerning Unauthorized Changes of Consumers\' Long
    Distance Carriers*, Second Report and Order and Further Notice of
    Proposed Rulemaking, CC Docket No. 94-129, FCC 98-334 at ¶ 85 (Dec.
    23, 1998) (*1998 Slamming Order and Further Notice*).

[^32]:     ^?^ *See* 47 U.S.C. §§201(b), 202. *Also* 47 U.S.C. §
    332(c)(1)(A). In our recent Order declining to forbear from applying
    sections 201and 202 of the Act to wireless providers, we emphasized
    that these sections \"codif\[y\]the bedrock consumer protection
    obligations of common carriers . . .\" *Wireless Forbearance Order*,
    11 FCC Rcd 16857, 16865. We also noted that their importance would
    increase \"as customers begin to rely on CMRS as a partial or
    complete substitute for wireline service . . .\" *Id.* at 16870.

[^33]:     ^?^*Notice*, 13 FCC Rcd at 18182.

[^34]:     ^?^ *See, e.g.*, GTC comments at 10-13 (Commission possesses
    jurisdiction under both under Title I and Title II of the Act); ACTA
    comments at 3-4 (same); BellSouth comments at 2 (Commission
    possesses jurisdiction under both under Title I and Title II of the
    Act, states possess concurrent jurisdiction); Minnesota OAG comments
    at 3 (billing constitutes \"practices in connection with
    communication service\" under 201(b), although Commission
    jurisdiction extends primarily to interstate toll charges); Billing
    Coalition comments at 8-10; MCI comments at 21 n. 15 (Commission
    possesses jurisdiction under Section 201(b) to enforce \"consumer
    protection obligations of common carriers\"); ELNC comments at 2-3
    (same); ECA comments at 3-5; NASUCA comments at 12 (Commission
    possesses authority to issue directives to providers under Title II
    of Act concerning manner in which charges are described or disclosed
    to customers).

[^35]:     ^?^ *See* 47 U.S.C. §§ 201(b), 258. In addition, section 332
    of the Act, 47 U.S.C. § 332, also provides us with jurisdiction to
    enact rules concerning CMRS carriers.

[^36]:     ^?^ 47 U.S.C. § 201(b).

[^37]:     ^?^ *AT&T Corp. v. Iowa Utils. Bd.*, 119 S.Ct. 721 (1999).

[^38]:     ^?^ *See infra* Section II(C)(2)(c).

[^39]:     ^?^ *See, e.g.,* ALTS comments at 2 n. 2 (stating that the
    Commission has no jurisdiction to adopt rules relating to billing of
    intrastate services); Ameritech comments at 4 (stating that the
    Commission does not have jurisdiction over intrastate bills except
    for pay-per-call services); AT&T comments at 11 n. 8 (stating that
    the Commission\'s jurisdiction likely only extends to billing of
    interstate telecommunications services); Bell Atlantic comments at
    Attachment, \"Answers to Specific Questions,\" at 2 (stating that
    the Commission lacks jurisdiction over charges for intrastate
    telecommunications services or over how those charges are billed);
    NYCPB comments at 7 n. 3 (stating that the authority to address the
    format and content of bills rendered by local telephone companies
    resides with the states).

[^40]:     ^?^47 U.S.C. § 258(a).

[^41]:     ^?^ *1998 Slamming Order and Further Notice* at ¶ 86.

[^42]:     ^?^ A preferred carrier freeze prevents a change in a
    subscriber\'s preferred carrier selection unless the subscriber
    gives the carrier from whom the freeze was obtained his or her
    express written or oral consent. *See* *1998 Slamming Order and
    Further Notice* at ¶ 112, n. 348.

[^43]:     ^?^ *Id*. at ¶ 5.

[^44]:     ^?^*Id*. at ¶ 4.

[^45]:     ^?^ *See*, *e.g.*, NCL comments at 2 (stating that fraudulent
    companies take advantage of consumer confusion over phone bills);
    NYCPB comments at 5 (stating that consumers often complain that
    telephone bills do not facilitate the detection of slamming); Texas
    Commission comments at 6 (stating that focus group found it
    difficult to find changes in services unless they were specifically
    anticipating and looking for one).

[^46]:     ^?^ For example, if a carrier is named \"Phone Calls,\" the
    name of such carrier on a telephone bill could be confused with
    telephone service, and the consumer may not realize that he or she
    has been switched to an unauthorized carrier. *See infra*, Section
    II(C)(2). We note the standardized label guideline provides an
    important consumer protection, as discussed *infra* Section
    II(C)(2)(c), but is not, however, related to deterring slamming.
    *See* *supra* ¶ 21.

[^47]:     ^?^ *See infra*, Section II(C)(3).

[^48]:     ^?^ For example, the Commission has previously warned a
    carrier that failure to correct misleading information it provided
    in connection with issuance of a calling card could constitute a
    violation of section 201(b) and result in enforcement action,
    including show cause or forfeiture proceedings. *See*, *e.g.*,
    *Robert E. Allen*, Letter, 7 FCC Rcd 7529, 7530 (1992) (information
    provided by carrier in connection with issuance of calling cards
    \"may have persuaded many consumers to unnecessarily destroy or
    discard otherwise valid calling cards\").

[^49]:     ^?^ *See, e.g.,* NYCPB comments at 5; FTC comments at 3, 6.

[^50]:     ^?^ *See*, *e.g.*, ALTS comments at 2; AT&T comments at 11 n.
    8; Time Warner comments at 7.

[^51]:     ^?^ *See Local Exchange Carrier Validation and Billing
    Information for Joint Use Calling Cards*, Report and Order and
    Request for Supplemental Comment, CC Docket No. 91-115, 7 FCC Rcd
    3528, 3530-3533 (1992), *clarified on reconsideration*, 12 FCC Rcd
    1632, 1643‑1645 (1997); *Public Service Commission of Maryland*,
    Memorandum Opinion and Order, 4 FCC Rcd 4000, 4004‑4006 (1989),
    *aff\'d* *Public Service Commission of Maryland v. FCC*, 909 F.2d
    1510 (D.C. Cir. 1990); *Detariffing of Billing and Collection
    Services*, Report and Order, CC Docket No. 85-88, 102 F.C.C.2d 1150,
    1169-71 (1986) (*Detariffing Order*).

[^52]:     ^?^The *Detariffing Order* states that:

    Although carrier billing and collection for a communication service
    that it offers individually or as a joint offering with other
    carriers is an incidental part of a communications service, we
    believe that carrier billing or collection for the offering of
    another unaffiliated carrier is not a communication service for
    purposes of Title II of the Communications Act.

    *Detariffing Order* 59 Rad. Reg. 2d (P & F) 1007, ¶ 31.

[^53]:     ^?^ *See* 47 U.S.C. § 201(b).

[^54]:     ^?^ *1998 Slamming Order and Further Notice* at ¶ 87.

[^55]:     ^?^ *1998 Slamming Order and Further Notice* at ¶¶ 86-90;
    see, *e.g.*, California Commission comments at 2 (stating that the
    Commission should set minimum standards, but not prevent states from
    applying stricter standards); Maine Commission comments at 2 (same);
    Minnesota OAG comments at 4 (same).

[^56]:     ^?^ *1998 Slamming Order and Further Notice* at ¶ 90.

[^57]:     ^?^Pennsylvania Commission comments at 4.

[^58]:     ^?^Mich. Admin. Code MCL 484.322(a), 484.337 (1996).

[^59]:     ^?^ NARUC, *White Paper on Resolution Urging Support of
    Principles Promoting Consumer Awareness and Protection by Policy
    Makers Involved with Telecommunications Regulation*, at 1 (NARUC
    White Paper).

[^60]:     ^?^ *Id*.

[^61]:     ^?^*See*, *e.*g., *1998 Slamming Order and Further Notice* at
    ¶ 87.

[^62]:     ^?^ *See* 15 U.S.C. § 45(a)(2) (stating that the Federal
    Trade Commission does not have jurisdiction over \"common carriers
    subject to the Acts to regulate commerce, air carriers, and foreign
    air carriers . . . .\"); *see also* FTC Comments at 7 n.10.

[^63]:     ^?^Pub. L. No. 102-556, 106 Stat. 4181 (1992) (codified at 15
    U.S.C. § 1507 *et seq*. and 47 U.S.C. § 228).

[^64]:     ^?^47 C.F.R. §§ 64.1510(a)(2)(ii), (iii).

[^65]:     ^?^*Id*. at § 64.1510(b).

[^66]:     ^?^ FTC comments at 7, *citing* Proposed Rules, Federal Trade
    Commission, 16 C.F.R. Part 308, Pay-Per-Call Rule, 63 Fed. Reg.
    58,524 (1998).

[^67]:     ^?^FTC comments at 8.

[^68]:     ^?^ *Notice,* 13 FCC Rcd at 18185-86.

[^69]:     ^?^ 47 U.S.C. §§ 201(b), 258.

[^70]:     ^?^ *Notice*, 13 FCC Rcd at 18185-18188.

[^71]:     ^?^ *See, e.g.,* Minnesota OAG comments at 13-15; NYDPS
    comments at 1; NYCPB comments at 12-13; USP&C comments at 5-6; NCL
    comments at 8-9; Commonwealth comments at 4; Century comments at
    5-6; West Virginia Commission comments at 2-3; Small Business
    comments at 8; SBC comments at 13-14; Sprint comments at 13-14; TCA
    comments at 5-6; Americatel comments at 1-6; Billing Coalition
    comments at 16; AT&T comments at 14-15; Ameritech comments at 17;
    FTC comments at 14-15; Maine Commission comments at 5-6; Ohio
    Commission comments at 8; Wisconsin Commission comments at 4;
    Missouri Commission comments at 3-4; Florida Commission comments at
    6; Washington Commission Staff comments at 6; AFT comments at 1;
    NAAG comments at 5; BellSouth comments at 7; Bills Project comments
    at 6; UCAN comments at 9; Georgia comments at 3; Kansas Commission
    comments at 5; NACAA comments at 2; Pennsylvania Commission comments
    at 7; QCI comments at 5.

[^72]:     ^?^ SBC comments at 13-14 (this information will aid the
    consumer in identifying the carrier responsible for the charge, and
    most LECs already follow this practice); Sprint comments at 13-14
    (identifying carrier levying the charge is particularly important
    where a reseller uses the carrier identification code (CIC) of the
    underlying facilities provider, and arguing that LECs should be
    required to use the Switchless Reseller Indicator in their service
    order systems); FTC comments at 14-15 (suggesting carriers list name
    of service provider and, where applicable, name and number of
    billing aggregator or clearinghouse with authority to resolve a
    consumer complaint).

[^73]:     ^?^ *See, e.g.,* Informal Complaint of WIS Sheet Metal Inc.,
    IC No. 99-00232 (submitted Jan. 13, 1999); Informal Complaint of
    Roberts & Roberts, IC No. 99-04707 (submitted Feb. 5, 1999); *see
    also* NASUCA comments at 15 (stating that billing aggregators often
    are unable to provide consumers information about charges). Billing
    aggregators or clearinghouses consolidate charges from multiple
    providers of telephone services and contract with LECs for those
    charges to appear on consumers\' telephone bills. Billing Coalition
    comments at 1.

[^74]:     ^?^ *See* Section II(E), *infra* (requiring that bills must
    display a toll-free number for an entity authorized to resolve
    consumer complaints).

[^75]:     ^?^ *See* NAAG comments at 5. NAAG further asserts that
    providers that do not wish to disclose their identity should not be
    permitted access to the billing process. *Id.*

[^76]:     ^?^ *See, e.g.,* Ameritech comments at 17; SBC comments at
    13-14; BellSouth comments at 7.

[^77]:     ^?^ We note that this guideline does not require wireless
    carriers to identify all entities with which they have roaming
    arrangements. We agree that listing each such entity would be both
    unnecessary and potentially confusing to consumers. *See e.g.*
    Primeco comments at 9; Bell Atlantic Mobile comments at 12-13;
    Airtouch comments at 6-7; CenturyTel comments at 5; BellSouth reply
    at 7; Bell Atlantic Mobile reply at 9.

[^78]:     ^?^ Specifically, we asked whether telephone bills might be
    improved by listing all charges by service type (*e.g.*, local, long
    distance, and miscellaneous services) in clearly separate sections
    of the bill or, alternatively, by grouping charges according to
    service provider. *Notice*, 13 FCC Rcd at 18185.

[^79]:     ^?^ *See*, *e.g.*, Florida Commission comments at 4-5; NCL
    comments at 7, Maine Commission comments at 2-3; Ohio Commission
    comments at 6; Ameritech comments at 13; BellSouth comments at 4;
    SBC comments at 4-5.

[^80]:     ^?^ *See*, *e.g.*, Ameritech comments at 13; BellSouth
    comments at 4; SBC comments at 4. *See also* California Commission
    comments at 4 (stating that California law requires separate
    sections for each billing entity).

[^81]:     ^?^ *See*, *e.g.*, Ameritech comments at 2, 13; Bell Atlantic
    comments at Attachment, \"Answers to Specific Questions,\" at 3-4.

[^82]:     ^?^ *See*, *e.g.*, Bell Atlantic comments at Attachment,
    \"Answers to Specific Questions,\" at 4-5; Sprint comments at 4; GTE
    comments at 10; Time Warner comments at 10-11; CTIA comments at 5; U
    S West comments at 17; SBC comments at 7; PCIA comments at 8; NCL
    comments at 7 (also stating that each service included in bundled
    offering should be itemized and described clearly).

[^83]:     ^?^ *See*, *e.g.*, Sprint comments at 4-5; BellSouth comments
    at 4.

[^84]:     ^?^ That is, if a new provider has become the customer\'s new
    presubscribed intra or interLATA toll carrier, the bill must make
    this information apparent to the customer.

[^85]:     ^?^ Small Business comments at 8 (arguing that merely listing
    name of billing aggregator or clearinghouse is insufficient, and
    that identifying the reseller instead of the underlying
    facilities-based carrier will assist consumers in detecting if they
    have been slammed by a reseller where the underlying
    facilities-based carrier remains the same).

[^86]:     ^?^ A carrier change charge is a charge typically imposed by
    a local exchange carrier on a subscriber who has requested a change
    in presubscribed interexchange carrier.

[^87]:     ^?^ *Notice*, 13 FCC Rcd at 18185.

[^88]:     ^?^ *See* 47 C.F.R. § 64.1100(d).

[^89]:     ^?^ We emphasized that this \"absolution\" rule would
    encourage telephone subscribers to examine their telephone bills
    early and carefully and observed that \"a waiver of the 30-day limit
    might be appropriate if the subscriber\'s telephone bill failed to
    provide reasonable notice to the subscriber of a carrier change.\"
    *1998 Slamming Order and Further Notice* at ¶¶ 20, 24.

[^90]:     ^?^ *See, e.g.,* U S West comments at 11 (stating that most
    consumer billing complaints involve \"third-party toll charges\").

[^91]:     ^?^ *FCC and Industry Announce Best Practice Guidelines to
    Protect Consumers from Cramming*, FCC Press Release (July 22, 1998).

[^92]:     ^?^TCA comments at 2-5.

[^93]:     ^?^*See*, *e.g.*, Informal Complaint of Sarah Krank, IC No.
    98-29550.

[^94]:     ^?^ Under the TDDRA, a telephone-billed purchase is defined
    as:

    any purchase that is completed solely as a consequence of the
    completion of the call or a subsequent dialing, touch tone entry, or
    comparable action of the caller. Such term does not include \--

    \(A\) a purchase by a caller pursuant to a preexisting agreement
    with the vendor;

    \(B\) local exchange telephone services or interexchange telephone
    services or any service that the Federal Communications Commission
    determines, by rule \--

    \(i\) is closely related to the provision of local exchange
    telephone services or interexchange telephone services; and

    \(ii\) is subject to billing dispute resolution procedures required
    by Federal or State statute or regulation; or

    \(C\) the purchase of goods or services which is otherwise subject
    to billing dispute resolution procedures required by Federal statute
    or regulation.

    15 U.S.C. § 5724(1).

[^95]:     ^?^Public Law l02-556, 106 Stat. 4181, approved Oct. 28,
    1992.

[^96]:     ^?^*Notice*, 13 FCC Rcd at 18185.

[^97]:     ^?^ *See*, *e.g.*, Ameritech comments at 11-12; Sprint
    comments at 7-8; RCA comments at 4; Bell Atlantic comments at
    Attachment, \"Answers to Specific Questions,\" at 6 (identifying new
    service charges each month would require comparing approximately 40
    million billing lines against previous month\'s entries); MCI
    comments at 34-35; U S West comments at 5, 20 (would require
    substantial and costly modification of three principal billing
    systems and approximately 30 interacting databases that are used to
    produce 12.2 million bills per month); PCIA comments at 9. [In
    contrast, highlighting each new service provider, as opposed to each
    new service, will be considerably more economical to
    implement.]{.underline}^?^    ^?^ Month-to-month comparison of
    service providers would involve far less data than comparison of all
    billed charges. [Opponents also question the ultimate value of
    highlighting new charges to elucidate fraud.]{.underline}^?^    ^?^
    *See, e.g.*, PCIA comments at 7-8; Ameritech comments at 10-11;
    BellSouth Reply comments at 5; Billing Coalition comments at 15-16.
    [Highlighting charges for new types of service probably would
    involve a larger number of items than highlighting new service
    providers. This could significantly lengthen bills and confuse
    consumers by repeating a significant amount of information that is
    shown elsewhere in the bill. Given the more economical alternative
    of provider-based identification which effectively communicates
    changes in service to the consumer, we believe that highlighting
    those service providers that did not charge for service on the
    previous bill is the better choice to advance consumer education and
    our anti-cramming and slamming goals.]{.underline}

[^98]:     ^?^ *See*, *e.g.*, Bell Atlantic comments at Attachment,
    \"Answers to Specific Questions,\" at 5 (consumers already complain
    about too many pages); FTC comments at 10-11.

[^99]:     ^?^ *See*, *e.g.*, Sprint comments at 6; USTA comments at 5
    (reporting that small USTA member estimates that adding additional
    page to bill would increase mailing costs by \$600,000 per year).

[^100]:     ^?^FTC comments at 10-11; NCL comments at 7.

[^101]:     ^?^ We agree with U S West that \"no reputable business can
    be against the ideas associated with \'truth‑in‑billing\' anymore
    than comparable ideas reflected in other \'truth‑in‑xxx\'
    initiatives, such as truth‑in‑lending or truth‑in‑advertising.\" U S
    West comments at 1*. See also Thompson Medical Co. Inc., v. Federal
    Trade Commission*, 791 F.2d 189, 195 (D.C. Cir. 1986) (a company has
    \"no right to stay in business if the only way it can do so is to
    engage in false and misleading advertising\").

[^102]:     ^?^ We agree with Sprint that a customer should be able to
    determine what service a carrier has provided based on the service
    description presented in his or her telephone bill. *See* Sprint
    comments at 11-13; *see also* TCA comments at 5-6 (language and
    format of the bill must be sufficiently clear in presentation and
    specific enough in content that customers can accurately assess that
    the services for which they are billed correspond to those they have
    requested and received, and that the costs assessed for those
    services conform to their understanding of their price).

[^103]:     ^?^*Notice*, 13 FCC Rcd at 18177.

[^104]:     ^?^ *See* *supra* Section II(A) (Adoption of Guidelines) and
    Section II(C) (Specific Truth-in-Billing Guidelines)*.*

[^105]:     ^?^ *See* Small Business comments at 7-9 (highlighting the
    problem of misleading carrier company names). By using a corporate
    name such as \"I Don\'t Know,\" an unscrupulous carrier can trick
    unwitting consumers into selecting it as their preferred carrier.
    For example, the telemarketing representative for the carrier I
    Don\'t Know may ask a leading question such as, \"Who would you like
    to be your long distance carrier?\" The consumer who responds, \"I
    don\'t know,\" may then have his phone service switched to the
    carrier I Don\'t Know.

[^106]:     ^?^ 47 U.S.C. § 258.

[^107]:     ^?^ *See, e.g.*, NASUCA comments at 15-16 (description
    should be conveyed in terms generally understood by ordinary
    customer); *see also* USP&C comments at 4-5 (descriptions should not
    use terminology comprehensible only to those who are well versed in
    telecommunications regulatory matters).

[^108]:     ^?^ We agree with NASUCA that no charge should be identified
    as \"miscellaneous\" or described by ambiguous terms that may
    confuse a customer or suggest that a service or product is regulated
    when in fact it is not. NASUCA comments at 16.

[^109]:     ^?^*See* Bills Project comments at 4 (describing Bell
    Atlantic line item charge).

[^110]:     ^?^ *See, e.g.,* UCAN comments at 8.

[^111]:     ^?^ *See, e.g.,* USTA comments at 5 (mentioning 30 character
    limit for service descriptions; USTA also maintains that many legacy
    billing systems have limited capabilities with respect to changing
    bill formats or including significantly more information); U S West
    comments at 21 (character limits prevent detailed service
    descriptions); Qwest comments at 6-7. *But see* CompTel comments at
    5 (characterizing cost of providing summary and status pages and
    toll-free customer contact number as \"modest\").

[^112]:     ^?^ GTE comments at 5-7; USTA comments at 8; Bell Atlantic
    comments at 3-4; Ameritech comments at 2; MCI comments at 6-7.

[^113]:     ^?^ *See, e.g.,* FTC comments at 3; TOPC reply at 2-3.

[^114]:     ^?^ NCL contends that we should create standard terms for
    carriers to use to describe services rendered, just as the Food and
    Drug Administration prescribes standard terms to refer to different
    food products. NCL suggests that providers that wish to use their
    own brand names or marketing terms should be obliged to also show
    the standard FCC description for each service. Developing standard
    terms should be collaborative process among companies, regulators,
    and consumer advocates, and NCL suggests that the proposed
    descriptions be tested with consumers to ensure they are understood.
    NCL comments at 7-8. *See also* Bills Project comments at 4; Kansas
    Commission comments at 4.

[^115]:     ^?^ *Notice*, 13 FCC Rcd at 18189.

[^116]:     ^?^*Id.*

[^117]:     ^?^ *See, e.g.,* Nevadacom comments at 4-5 (distinguishing
    between deniable and non-deniable charges will reduce tendency of
    consumers to pay unauthorized charges out of fear that local service
    will be disconnected if they fail to pay and arguing that this
    Commission should reaffirm that it and state commissions, and not
    the LECs, have authority to determine which charges are deniable);
    Small Business comments at 13 (such disclosure is necessary so that
    small business users will know what charges they can contest and not
    pay pending resolution of their complaint without fear of having
    their service disconnected); TCA comments at 7-9 (recounting
    specific instances where customer service representatives attempted
    to intimidate and to mislead intentionally consumers into believing
    that service would be cut off for failure to pay a non-deniable
    charge); Wisconsin Commission comments at 4 (noting that the threat
    of loss of service is not an appropriate collection tool); NASUCA
    comments at 16; USP&C comments at 6-7; NYCPB comments at 13; BRTF
    comments at 3-4; FTC comments at 15-16; Maine Commission comments at
    7; Ohio Commission comments at 9-10; Missouri Commission comments at
    4; Florida Commission comments at 6-7; TOPC comments at 1-2; AARP
    comments at 3; Bills Project comments at 7; UCAN comments at 9;
    Kansas Commission comments at 5; NACAA comments at 2; Pennsylvania
    Commission comments at 7; West Virginia Commission comments at 2.

[^118]:     ^?^*See* NYCPB comments at 13.

[^119]:     ^?^ FTC comments at 15-16.

[^120]:     ^?^ *See* 47 C.F.R. § 64. 1510(c)(1); *see also Policies and
    Rules Implementing the Telephone Disclosure and Dispute Resolution
    Act,* Report and Order, 8 FCC Rcd 6885, 6898 (1993).

[^121]:     ^?^ *See, e.g.,* NASUCA comments at 16 (stating that terms
    \"deniable\" and \"undeniable\" are not easily understood by average
    customers, and that clear disclosure that basic service cannot be
    terminated if non-basic or unregulated charges are unpaid would be
    preferable); Maine Commission comments at 7.

[^122]:     ^?^ *See, e.g.,* AARP comments at 3 (noting that monthly
    bill could identify deniable charges with an asterisk and include a
    brief description of the terms deniable and non-deniable at the
    bottom of the bill); BellSouth comments at 9 (recommending use of an
    asterisk).

[^123]:     ^?^ Section 228 of the Act states that carriers must
    annotate pay-per-call charges on telephone bills as follows:
    \"Common carriers may not disconnect local or long distance service
    for failure to pay disputed charges for information service.\" 47
    U.S.C. § 228(c)(8)(B)(ii).

[^124]:     ^?^ We note that the precise language used to describe
    clearly and conspicuously those charges for which non-payment would
    not result in termination of local service is at the discretion of
    the carrier that is seeking payment for these charges. Thus, while a
    carrier may elect to have another entity bill the charges, this
    guideline does not permit the billing entity to decide unilaterally
    the appropriate language.

[^125]:     ^?^ *See, e.g.,* US Cellular comments at 6-7 (arguing that
    the distinction between \"deniable\" and \"non-deniable\" charges
    possesses little relevance for wireless carriers as all wireless
    charges are \"deniable\").

[^126]:     ^?^ *See, e.g.,* Media One comments at 3; Commonwealth
    comments at 5; Qwest comments at 7; Ameritech comments at 15.

[^127]:     ^?^*Notice*, 13 FCC Rcd at 18189.

[^128]:     ^?^ *See, e.g.,* GTC comments at 14-16; Media One comments
    at 1-4; PMT comments at 5-6; NITCO comments at 4; Liberty comments
    at 4; CompTel comments at 7-8; C&W comments at 11; Commonwealth
    comments at 4; Century comments at 5-6; SBC comments at 14-15;
    Sprint comments at 14-16; Excel comments at 11; ALTS comments at
    9-10; Time Warner comments at 14; ACTA comments at 8; Bell Atlantic
    comments at Attachment, \"Answers to Specific Questions,\" at 9-10;
    Ameritech comments at 15-16; GST comments at 21-24.

[^129]:     ^?^ *Notice*, 13 FCC Rcd at 18188.

[^130]:     ^?^ *See Access Charge Reform*, First Report and Order, CC
    Docket No. 96-262, 12 FCC Rcd 15982 (1997) (*Access Reform Order*);
    *Federal-State Joint Board on Universal Service*, Report and Order,
    CC Docket No. 96-45, 12 FCC Rcd 8776 (1997) (*Universal Service
    Order*).

[^131]:     ^?^ *See* *Universal Service Order*, 12 FCC Rcd at 9211;
    *Access Reform Order*, 12 FCC Rcd at 16005.

[^132]:     ^?^ The Presubscribed Interexchange Carrier Charge (PICC) is
    the charge billed by interexchange carriers to recover a portion of
    the fees paid to local telephone companies for access to their
    networks.

[^133]:     ^?^ Florida Commission comments at Attachment A.

[^134]:     ^?^ *Id*.

[^135]:     ^?^ Some labels for line-item charges for the recovery of
    access fees include \"Carrier Line Charge,\" \"National Access
    Fee,\" \"Presubscribed Line Charge,\" and \"PIC Charge.\" *Id*.

[^136]:     ^?^ Pursuant to our access charge rules, carriers may set
    higher caps for the subscriber line charges and presubscribed
    interexchange carrier charges assessed on non-primary residential
    lines and multi-line business lines than on primary residential
    lines and single line business lines. In the *Primary Lines Order*,
    we adopted requirements for differentiating and identifying such
    lines and decided to consider whether to require carriers to provide
    consumers with a uniform disclosure statement describing the
    distinction between primary and non-primary residential lines in
    conjunction with this, our Truth-in-Billing proceeding. *Defining
    Primary Lines*, Report and Order & Further Notice of Proposed
    Rulemaking, CC Docket No. 97-181, 1999 WL 125821 (1999) (*Primary
    Lines Order*). We hereby incorporate the comments from the Primary
    Lines rulemaking into the record of this proceeding.

[^137]:     ^?^ *Id*.

[^138]:     ^?^ *Telephone Number Portability*, Third Report and Order,
    CC Docket No. 95-116, 13 FCC Rcd 11701 (1998).

[^139]:     ^?^ *See* Jeannine Aversa, *Yet Another New Fee Showing Up
    On Telephone Bills*, Associated Press Newswires, Feb. 19, 1999.

[^140]:     ^?^ *See* Bills Project comments at 4 (stating that \"\[i\]n
    general, consumers are confused by the various taxes, surcharges and
    other charges that appear on their bills\"); NYCPB comments at 13
    (stating that in their experience, \"many consumers are confused by
    current explanations on telephone bills concerning access charges
    and universal service fees.\").

[^141]:     ^?^ *See, e.g.*, Vermont Commission comments at 11 (stating
    that carriers should avoid suggesting that a charge is a government
    tax on the consumer); Maine Commission comments at 8 (asserting that
    carriers \"should be required to clearly and unambiguously state
    that the surcharges are part of the carrier\'s rate structure and
    are not mandated by any regulatory or taxing entity.\").

[^142]:     ^?^ *See* AARP comments at 3 (arguing that consumers must be
    able to compare among carriers to select the best value, but making
    comparisons becomes difficult if carriers choose different names for
    the same charge).

[^143]:     ^?^ California Commission comments at 7-8.

[^144]:     ^?^ Minnesota OAG comments at 11-12. *See also* RUS reply at
    2 (stating that \"\[e\]fforts to break out new line items as
    universal service fees or taxes are misleading to consumers,
    particularly since none of the other costs of business, such as
    advertising, stock options, or salaries, are highlighted in this
    manner. . . A separate line item charge for universal service may
    disguise a rate increase, or allow a carrier to advertise an
    apparently low per‑minute rate, a rate \[that\] doesn\'t actually
    exist once the line item is added to the bill.\").

[^145]:     ^?^ For example, NASUCA proposes that carriers be required
    to disclose the average per line universal service and access
    charges on the same page as a customer\'s individual statement of
    universal service and access charge-related line items. *See* NASUCA
    comments at 19.

[^146]:     ^?^ Century reply at 8 (stating that \"\[c\]arriers should
    have the freedom to respond to consumer demand and market place
    forces in determining whether to include these charges as part of
    their rates, to bundle the charges as one line item or to list the
    charges in separate line items.\").

[^147]:     ^?^ Notably, several commenters state that such language may
    be regarded as *de facto* mandatory, and that it would be difficult
    to script language that would be relevant to all carriers in all
    situations. *See* MCI comments at 38-39; Qwest comments at 7; Paging
    Network reply at 4.

[^148]:     ^?^ *See* Bills Project comments at 5; Detecon comments at
    4; Kansas Commission comments at 6; Pennsylvania Commission comments
    at 8. Some commenters suggest that the Commission should eliminate
    carriers\' discretion as to how they recover universal service
    contributions, and require instead that contributions be recovered
    through federally mandated surcharges. *See* AT&T comments to
    *Second Recommended Decision* at 9; Ameritech comments to *Second
    Recommended Decision* at 11; U S West comments to *Second
    Recommended Decision* at 15. The Commission previously considered
    and rejected this approach in the *Universal Service Order*.
    *Universal Service Order*, 12 FCC Rcd at 9210-11. Based on
    recommendations from the Joint Board, we concluded that, in a
    competitive telecommunications market, carriers should be allowed to
    decide how they should recover their contributions, and mandatory
    recovery through an end-user surcharge would eliminate carriers\'
    pricing flexibility to the detriment of consumers. *Id*. In its
    *Second Recommended Decision*, the Joint Board reaffirmed its
    recommendation that carriers should have the flexibility to decide
    how they recover their universal service contributions. *Second
    Recommended Decision*, 13 FCC Rcd at 24,771. We find no compelling
    reason to depart from our earlier conclusions or the Joint Board\'s
    recommendations regarding this issue.

[^149]:     ^?^ *See, e.g.*, NCL comments at 8; Maine Commission
    comments at 7-8. *See also* RUS reply at 2; Wisconsin Commission
    comments at 5.

[^150]:     ^?^ *Second Recommended Decision*, 13 FCC Rcd at 24770. In
    the *Universal Service Order*, the Commission determined that it
    would be misleading for carriers to characterize their universal
    service contributions as a surcharge, because carriers retain the
    flexibility to structure the recovery of the costs of universal
    service in many ways. *Universal Service Order*, 12 FCC Rcd at
    9211-12.

[^151]:     ^?^ *See* *Notice*, 13 FCC Rcd at 18,190.

[^152]:     ^?^ *See* *Second Recommended Decision*, 13 FCC Rcd at
    24771.

[^153]:     ^?^ *See* SBC comments at 20; Air Touch comments at 7;
    Nextel reply at 5-6.

[^154]:     ^?^ Omnipoint comments at 14-15; PCIA comments at 15-16;
    Nextel reply at 5-6.

[^155]:     ^?^ MCI comments to *Second Recommended Decision* at 20-21.

[^156]:     ^?^ 47 U.S.C. § 201(b).

[^157]:     ^?^ We asked for comment on a number of related proposals
    requiring carriers to disclose or explain particular costs in their
    monthly bills. Specifically, we asked: (1) whether long distance
    carriers that include a separate line item for the recovery of
    universal service contributions should be required to explain the
    net reduction in their costs of providing long distance service
    since enactment of the 1996 Act; (2) whether carriers attributing
    line items to new government action should be required to disclose
    exact cost reductions, such as reduction in access charge costs, or
    other related benefits arising from government action; (3) whether
    carriers who assess a PICC should be required to show whether the
    corresponding reduction in the per-minute rate was actually passed
    on to each individual consumer; (4) whether carriers should include
    the exact cost of PICC and universal service obligations incurred as
    a result of serving that customer; and (5) whether it would be
    helpful to consumers if carriers were required to explain in
    customer bills their reasons for assessing a flat fee or percentage
    charge to recover amounts that exceed the costs the carrier incurs*.
    Notice*, 13 FCC Rcd at 18189-90.

[^158]:     ^?^ *See* SBC comments at 21 (stating that customers want
    shorter, simpler bills, not bills that attempt to explain the
    history of telephone regulation and the cost basis for all of the
    charges shown on the bill).

[^159]:     ^?^ GTE comments at 17-18 (filed in CC Docket No. 97-181).

[^160]:     ^?^ *See, e.g.*, Sprint comments at 18-19 (stating that
    \"the Commission can and should rely upon market forces to determine
    long distance rate levels and to ensure that IXCs pass through any
    access charge reductions.\").

[^161]:     ^?^ 47 U.S.C. § 201(b). We decline, however, to find that it
    is a *per se* violation of section 201(b) for a carrier to bill
    customers for more than their *pro rata* share of universal service
    and access fees. *See* *Notice*, 13 FCC Rcd at 18190. Some
    commenters assert that it may be impractical to allocate accurately
    some line-item charges to an individual customer on a per-bill
    basis. *See* SBC comments at 20; Air Touch comments at 7; Nextel
    reply at 5-6. For example, a carrier\'s universal service
    contributions may depend on variables whose values are not known at
    the time the carrier issues a bill, such as the total revenue
    contribution base of all carriers and the high-cost and low-income
    projections for universal service support. Omnipoint comments at
    14-15; PCIA comments at 16; Nextel reply at 5-6.

[^162]:     ^?^ *See* *Notice*, 13 FCC Rcd at 18190.

[^163]:     ^?^ *See infra* Section II(C)(3) (Clear and Conspicuous
    Disclosure of Inquiry Contacts).

[^164]:     ^?^ In addition, customer service representatives should
    give the caller the option of obtaining a hard copy of the
    descriptions of these charges via the Internet or regular mail, or
    both, according to the preference of the customer.

[^165]:     ^?^ ACTA comments at 8.

[^166]:     ^?^ *Central Hudson Gas & Electric Corp. v. Public Service
    Commission*, 447 U.S. 557, 563-564 (1980) (*Central Hudson*).

[^167]:     ^?^ *Id*. at 566.

[^168]:     ^?^ *Id*.

[^169]:     ^?^ *Id*. at 568.

[^170]:     ^?^ *National Commission on Egg Nutrition v. FTC*, 570 F.2d
    157, 162 (7th Cir. 1977), *cert. denied*, 439 U.S. 821 (1978).

[^171]:     ^?^ *Board of Trustees v. Fox*, 492 U.S. 469, 480 (1989)
    (citing *In re R.M.J.*, 455 U.S. 191, 203 (1982)); *see also* *Ward
    v. Rock Against Racism*, 109 S. Ct. 2746, 2758 (1989) (a regulation
    is narrowly tailored if government interest would be achieved less
    effectively without the regulation).

[^172]:     ^?^ 15 U.S.C. §§ 1601 *et seq*.

[^173]:     ^?^ 15 U.S.C. §§ 1606, 1638.

[^174]:     ^?^ 15 U.S.C. § 1601(a); *Mourning v. Family Publications
    Service, Inc.*, 411 U.S. 356, 363, 365 (1973).

[^175]:     ^?^ 116 S. Ct. 1495 (1996) (*44 Liquormart*).

[^176]:     ^?^ BellSouth comments at 9-10 (stating that each provider
    of billed services should include on the bill page a toll-free
    telephone number which consumers may contact to obtain information
    and/or register a complaint); U S West comments at 23 (asserting
    that it would be helpful to a consumer to have a phone number
    associated with every service provider, yet the number should not
    necessarily be that of the service provider itself, but should be a
    number that can handle inquiries on behalf of the service provider
    and provide customer resolution of disputes). *See also* Ameritech
    comments at 16; AT&T comments at 14-15; Sprint comments at 21; C&W
    comments at 12; Excel comments at 14; NYCPB comments at 14;
    Wisconsin Commission comments at 6; Missouri Commission comments at
    4-5; Maine Commission comments at 8; Ohio Commission comments at 11;
    Washington Commission Staff comments at 7; NCL comments at 9; USTA
    comments at 8.

[^177]:     ^?^ The toll-free number should be accessible to persons
    with disabilities. For example, the carrier could either have a
    toll-free TTY line, or their toll-free line should not have barriers
    to TRS service.

[^178]:     ^?^ *See, e.g.*, Bell Atlantic comments at 13.

[^179]:     ^?^ Carriers should also provide an e-mail address so that
    their customers will have the option of communicating with the
    carrier via electronic mail.

[^180]:     ^?^ *See supra 1998 Slamming Order and Further Notice*.

[^181]:     ^?^ *See, e.g.*, Washington Commission Staff comments at 7.

[^182]:     ^?^ *See*, *e.g.*, Ohio Commission comments at 11.

[^183]:     ^?^ *See* *Notice*, 13 FCC Rcd at 18191.

[^184]:     ^?^ 47 C.F.R. § 201(b).

[^185]:     ^?^ Under Section 10, the Commission shall forbear from
    applying any regulation to a telecommunications carrier or class of
    carriers if the Commission determines that \--

    (1)enforcement of such regulation or provision is not necessary to
    ensure that the charges, practices, classifications, or regulations
    by, for, or in connection with that telecommunications carrier or
    telecommunications service are just and reasonable and are not
    unjustly or unreasonably discriminatory;

    (2)enforcement of such regulation or provision is not necessary for
    the protection of consumers; and

    (3)forbearance from applying such provision or regulation is
    consistent with the public interest.

    With respect to the public interest analysis, the Commission must
    also consider whether forbearance from enforcing the provision or
    regulation will promote competitive market conditions, including the
    extent to which such forbearance will enhance competition among
    providers of telecommunications services. If the Commission
    determines that such forbearance will promote competition among
    providers of telecommunications services, that determination may be
    the basis for a Commission finding that forbearance is in the public
    interest.

[^186]:     ^?^ *See Annual Report and Analysis of Competitive Market
    Conditions With Respect to Commercial Mobile Services*, 13 FCC Rcd
    19746, 19817 (1998) (noting that "mobile telephone operators are
    beginning . . . to position their services as true replacements for
    the wire-based services of LECs"); *Id*. at 19819 (The Commission
    "should hasten the day when consumers begin to view wireless as a
    real substitute for wireline, and not just a complement.") (Separate
    Statement of Chairman William E. Kennard). *But see Application of
    BellSouth Corporation, BellSouth Telecommunications, Inc., and
    BellSouth Long Distance, Inc. for Provision of In-Region, InterLATA
    Services in Louisiana*, CC Docket No. 98-121 (rel. Oct. 13, 1998) at
    para. 43 (noting that BellSouth\'s wireline customers, particularly
    residential customers, are unlikely to switch to wireless service as
    a competitive alternative to wireline because of rate structure
    involved).

[^187]:     ^?^ *1998 Slamming Order and Further Notice* at ¶ 85.

[^188]:     ^?^ PCIA comments at 7; RCA comments at 2; Air Touch
    comments at 2; Nextel comments at 2.

[^189]:     ^?^ *See supra* Section II(C)(2)(b).

[^190]:     ^?^ We recognize, however, that billing for CMRS may change
    or evolve from current practices.

[^191]:     ^?^ Florida Commission comments at 8.

[^192]:     ^?^ *See* 5 U.S.C. § 603. The RFA, *see* 5 U.S.C. § 601 *et.
    seq*., has been amended by the Contract With America Advancement Act
    of 1996, Pub. L. No. 104-121, 110 Stat. 847 (1996) (CWAAA). Title II
    of the CWAAA is the Small Business Regulatory Enforcement Fairness
    Act of 1996 (SBREFA).

[^193]:     ^?^ *Notice*, 13 FCC Rcd at 18194.

[^194]:     ^?^*See* 5 U.S.C. § 604.

[^195]:     ^?^ 47 U.S.C. § 258. Our jurisdiction to enact
    truth-in-billing requirements also stems from section 201(b) of the
    Act. *See supra* Section II(B) (Legal Authority).

[^196]:     ^?^ State commissions and the FTC also have received
    thousands of complaints. *See, e.g.,* Kansas Commission comments at
    1; FTC comments at 5. *See also* NASUCA reply at 2 (complaints
    received by FCC represent \"tip of the iceberg\"). *See supra*
    Sections I, II(A).

[^197]:     ^?^ PCIA comments at 9; Liberty comments at 2-3; RTG
    comments at 6-7; RCA comments at 3-5; PMT comments at 3-4.

[^198]:     ^?^ PCIA reply at 9.

[^199]:     ^?^ *Id*.

[^200]:     ^?^ RTG comments at 6-7.

[^201]:     ^?^ OMB Action at 2.

[^202]:     ^?^ *Id*.

[^203]:     ^?^ *Id*.

[^204]:     ^?^ *Id*.

[^205]:     ^?^ *Id*.

[^206]:     ^?^ *See infra* Sections II(A), III(A).

[^207]:     ^?^5 U.S.C. § 603(b)(3).

[^208]:     ^?^*Id.* at § 601(6).

[^209]:     ^?^ 5 U.S.C. § 601(3) (incorporating by reference the
    definition of \"small business concern\" in 15 U.S.C. § 632).
    Pursuant to the RFA, the statutory definition of a small business
    applies \"unless an agency, after consultation with the Office of
    Advocacy of the Small Business Administration and after opportunity
    for public comment, establishes one or more definitions of such term
    which are appropriate to the activities of the agency and publishes
    such definition(s) in the Federal Register.\" 5 U.S.C. § 601(3).

[^210]:     ^?^Small Business Act, 15 U.S.C. § 632 (1996).

[^211]:     ^?^ FCC, Telecommunications Industry Revenue: TRS Fund
    Worksheet Data, Figure 2 (Number of Carriers Paying Into the TRS
    Fund by Type of Carrier) (Nov. 1997) (*Telecommunications Industry
    Revenue*). We believe that the TRS Fund Worksheet Data is the most
    reliable source of information for our purposes because carriers
    file the TRS worksheets yearly and are instructed to select the
    single category of type of service provision that best describes
    them. Other sources of carrier data, such as the tariffs on file
    with the Common Carrier Bureau, may not reflect the same figures as
    the TRS Fund Worksheet Data, because such sources are not updated
    annually.

[^212]:     ^?^*Id.*

[^213]:     ^?^ 13 C.F.R. § 121.201, Standard Industrial Classification
    (SIC) codes 4812 and 4813. *See also* Executive Office of the
    President, Office of Management and Budget, *Standard Industrial
    Classification Manual* (1987).

[^214]:     ^?^ *See* 13 C.F.R. § 121.201, SIC code 4813. Since the time
    of the Commission\'s 1996 decision, *Implementation of the Local
    Competition Provisions in the Telecommunications Act of 1996, First
    Report and Order*, 11 FCC Rcd 15499, 16144-45 (1996), 61 FR 45476
    (August 29, 1996), the Commission has consistently addressed in its
    regulatory flexibility analyses the impact of its rules on such
    ILECs.

[^215]:     ^?^ U.S. Department of Commerce, Bureau of the Census, *1992
    Census of Transportation, Communications, and Utilities:
    Establishment and Firm Size*, at Firm Size 1‑123 (1995) (*1992
    Census*).

[^216]:     ^?^*See generally* 15 U.S.C. § 632(a)(1).

[^217]:     ^?^*1992 Census, supra*, at Firm Size 1‑123.

[^218]:     ^?^13 C.F.R. § 121.201, SIC code 4813.

[^219]:     ^?^*Id*.

[^220]:     ^?^*Telecommunications Industry Revenue*, Figure 2.

[^221]:     ^?^13 C.F.R. § 121.201, SIC code 4813.

[^222]:     ^?^*Telecommunications Industry Revenue*, Figure 2.

[^223]:     ^?^13 C.F.R. § 121.201, SIC code 4813.

[^224]:     ^?^*Telecommunications Industry Revenue*, Figure 2.

[^225]:     ^?^13 C.F.R. § 121.201, SIC code 4813.

[^226]:     ^?^*Telecommunications Industry Revenue*, Figure 2.

[^227]:     ^?^The service is defined in Section 22.99 of the
    Commission\'s Rules, 47 C.F.R. § 22.99.

[^228]:     ^?^ BETRS is defined in Sections 22.757 and 22.759 of the
    Commission\'s Rules, 47 C.F.R. §§ 22.757, 22.759.

[^229]:     ^?^13 C.F.R. § 121.201, SIC code 4812.

[^230]:     ^?^An exception is the Direct Broadcast Satellite (DBS)
    Service, *infra.*

[^231]:     ^?^13 C.F.R. § 120.121, SIC code 4899.

[^232]:     ^?^ *1992 Economic Census Industry and Enterprise Receipts
    Size Report,* Table 2D, SIC code 4899 (U.S. Bureau of the Census
    data under contract to the Office of Advocacy of the U.S. Small
    Business Administration).

[^233]:     ^?^ *International Telecommunications Data,* All Carriers:
    International Message Telephone Resale Service at Tbl. D1.

[^234]:     ^?^13 C.F.R. § 121.201, SIC code 4812.

[^235]:     ^?^*1992 Census, Series UC92-S-1*, at Table 5, SIC code
    4812.

[^236]:     ^?^*Telecommunications Industry Revenue,* Figure 2.

[^237]:     ^?^13 C.F.R. § 121.201, SIC code 4812.

[^238]:     ^?^*Id*.

[^239]:     ^?^*Telecommunications Industry Revenue,* Figure 2.

[^240]:     ^?^13 C.F.R. § 121.201, SIC code 4812.

[^241]:     ^?^*Telecommunications Industry Revenue*, Figure 2.

[^242]:     ^?^ *See Amendment of Parts 20 and 24 of the Commission\'s
    Rules \-- Broadband PCS Competitive Bidding and the Commercial
    Mobile Radio Service Spectrum Cap, Report and Order*, WT Docket No.
    96-59, 11 FCC Rcd 7824, 7850-52 (1996), 61 FR 33859 (July 1, 1996)
    (*Broadband PCS Competitive Bidding Order*); *see also* 47 C.F.R. §
    24.720(b).

[^243]:     ^?^ *See Broadband PCS Competitive Bidding Order*, 11 FCC
    Rcd at 7852.

[^244]:     ^?^ *See, e.g.,* Implementation of Section 309(j) of the
    Communications Act \-- Competitive Bidding, PP Docket No. 93-253,
    *Fifth Report and Order,* 9 FCC Rcd 5532, 5581-84 (1994).

[^245]:     ^?^FCC News*, Broadband PCS, D, E and F Block Auction
    Closes, N*o. 71744 (released January 14, 1997).

[^246]:     ^?^*See* 47 C.F.R. § 90.814(b)(1).

[^247]:     ^?^13 C.F.R. § 121.201, SIC 4841.

[^248]:     ^?^ *See infra* Section II(A), Section III(A).

[^249]:     ^?^*See* 5 U.S.C. § 801(a)(1)(A).

[^250]:     ^?^*See* 5 U.S.C. § 604(b).

[^251]:     ^?^ OMB Action at 2.

[^252]:     ^?^ *See infra* Section II(A), Section III(A).

[^253]:     ^?^ *See supra* Section III.

[^254]:     ^?^ *See* 5 U.S.C. § 603(a).

[^255]:     ^?^ *See id*.

[^256]: *Order* at ¶ 54.

[^257]: *Id.*

[^258]: *See, e.g., Federal-State Joint Board on Universal Service,* CC
    Docket No. 96-45, Report and Order, 12 FCC Rcd 8776, 9209, ¶ 851
    (1997) (*Universal Service Order*)).

[^259]: *Virginia State Corp. Comm'n v. MCI Telecommunications Corp.,*
    1999 WL 152543, FCC 99-42, File No. E-99-01 (rel. Mar. 22, 1999), ¶
    19 (allowing carrier to recover universal service contributions from
    end users via line items on bills because "\[t\]he *Universal
    Service Order* generally *permits, but does not require,* carriers
    to recover the cost of their universal service contributions from
    their 'customers of interstate services'") (emphasis added) (citing
    *Universal Service Order*, 12 FCC Rcd at 9209, ¶ 851).

[^260]: *See, e.g., Order* at ¶ 7 ("Even in competitive markets,
    however, disclosure rules *are needed* to protect consumers.")
    (emphasis added); *id.* at ¶ 7 n.17 ("Because mature markets also
    require disclosure rules, we disagree with ALTS' argument that any
    confusion over billing formats that exists today is merely the
    result of the transition to fully competitive telecommunications
    markets."). The erroneous notion that competitive markets are unable
    to protect consumers is also implicit in our apparent decision to
    seek comment on whether to forbear *only* from the requirements the
    *Order* *declines* to impose on CMRS carriers, rather than
    forbearing from all of these truth in billing requirements with
    respect to these carriers. *Order* at ¶ 68 ("\[W\]e believe that all
    consumers expect and should receive bills that are fair, clear, and
    truthful. However, absent evidence that there is a problem with
    wireless bills, it might not be necessary to apply the *remaining*
    rules in the wireless context.") (emphasis added).

[^261]: *See generally* Frederick F. Reicheld & Thomas A. Teal, *The
    Loyalty Effect: The Hidden Force Behind Growth, Profits, and Lasting
    Value* (Harvard Business School Press) (1996) (documenting
    quantitative research demonstrating that firms that retain customers
    dramatically improve their profitability by improving revenue
    growth, learning and productivity).

[^262]: *See supra* note 5.

[^263]: *See, e.g.,* Kathy Chen, *Miracle of the Bells: the Simplified
    Phone Bill,* Wall St. J., Apr. 12, 1999, at B1.

[^264]: Congress was unmistakably clear in its judgment that the
    Commission must rely on markets and competition, rather than
    regulation, to oversee the development of communications and
    information services markets. *See* 47 U.S.C. § 160 ("\[T\]he
    Commission *shall* forbear from applying any regulation or any
    provision of this Act . . . if the Commission determines that . . .
    enforcement of such regulation or provision is *not necessary* to
    ensure that . . . charges, practices, classifications, or
    regulations . . . are just and reasonable . . . ; enforcement of
    such regulation or provision is not necessary for the protection of
    consumers; and forbearance . . . is consistent with the public
    interest.") (emphases added); 47 U.S.C. § 161 (requiring the
    Commission to review "all regulations" every two years to "determine
    whether *any* such regulation is no longer necessary in the public
    interest as the result of meaningful *economic competition* between
    providers of such service"); Joint Manager's Statement, S. Conf. No.
    104-230, 104^th^ Cong., 2d Sess. 1 (1996) (conference report
    indicating that purpose of 1996 Act is "to provide for a
    *pro-competitive, de-regulatory* national policy framework designed
    to accelerate rapidly *private sector* deployment of advanced
    telecommunications and information technologies and services *by
    opening all telecommunications markets to competition* . . .")
    (emphases added).

[^265]: *Order* at ¶ 16.

[^266]: *See cf. Order*, Appendix A, 47 C.F.R. § 64.2001(a)(2) (limiting
    requirement of clear and conspicuous notification of new service
    providers to situations "where charges for two or more carriers
    appear on the same telephone bill").

[^267]: *Order*, Appendix A, 47 C.F.R. § 64.2000(b). The *Order* also
    declines to impose the requirements pertaining to changes in service
    providers, as well as to "deniable" and "non-deniable" charges, on
    CMRS carriers. *Id.* These rules, however, would be largely
    inapplicable to CMRS carriers anyway, given the nature of the
    charges billed and the fact that CMRS carriers generally bill
    directly and only for their own services.

[^268]: \"\[N\]o carrier should have its billing information restricted
    or limited by the Commission. The Commission has explicitly provided
    carriers with the flexibility to decide how to recover their
    payments, including as charges on consumers bills, and I am
    concerned by implications that such charges are fraudulent or
    misrepresentations.\" *Dissenting Statement of Commissioner Harold
    Furchtgott-Roth Regarding the Report to Congress in Response to
    Senate Bill 1768 and Conference Report on H.R. 3579*, rel. May 8,
    1998.

[^269]: *See 1998 Slamming Order and Further Notice*, CC Docket No.
    94-129 (Rel Dec. 23, 1998).

[^270]: For a fuller discussion of my view on some of these
    requirements, for example, see my *Report on Implementation of
    Section 11 by the Federal Communications Commission* (Dec. 21,
    1998), which can be found on the FCC WWW site at
    \<http://www.fcc.gov/commissioners/furchtgott‑roth/reports/sect11.html\>.

[^271]: The majority expressly states that \"such \[CMRS\] providers
    remain subject to the reasonableness and nondiscrimination
    requirements of section 201 and 202 of the Act, and our decision
    here in no way diminishes such obligations as they may relate to the
    billing practices of CMRS carriers.\" *Supra* at para. 19.

[^272]: *In the Matter of Federal‑State Joint Board on Universal
    Service*, Third Order on Reconsideration, CC Docket No. 96‑45, 12
    FCC Rcd. 22801, 22814 (1997) (Dissenting Statement of Commissioner
    Furchtgott-Roth).

[^273]: Monday December 8, *Communications Daily*.

[^274]: *In the Matter of Federal‑State Joint Board on Universal
    Service*, Third Order on Reconsideration, CC Docket No. 96‑45, 12
    FCC Rcd. 22801, 22814 (1997) (Dissenting Statement of Commissioner
    Furchtgott-Roth).

[^275]: *See also* *FCC Caught in Middle on Rate Rise*, June 11, 1998 at
    C-3 (\"The FCC had hoped that long distance carriers would absorb
    the costs of the program, . . . But AT&T Corp., MCI Communications
    Corp. and other carriers plan to levy new charges, . . . \"). *See
    Generally*, *Some MCI Customers Seeing Surge in Phone Bills*,
    Washington Post, January 31, 1998 at page H-3 (\"FCC officials are
    upset about being blamed by MCI for the new charges. The agency
    maintains that the universal service fees are technically charged to
    local phone companies, . . . which are authorized to seek
    compensation from long distance carriers. It\'s up to MCI and other
    long-distance companies to decide how to pay, the FCC contends.\").

[^276]: *See also*, *id.* (\"The blame inevitably finds its way to Gore,
    whose hands many see in virtually everything the FCC does.\"); *A
    New Tax for the New Year*, The Washington Post, December 2, 1997,
    (\"The Internet in-the-schools idea was hatched by Vice President
    Gore and his friend Reed Hundt, the recently departed FCC chairman.
    They consistently tout the benefits of the program, but not its
    costs.\"); *Senators tell FCC \"Gore tax\" too costly*, The
    Washington Times, June 11, 1998 at B-9 (\"Lawmakers said the FCC
    overreached its mandate by setting up a \$2.25 billion fund to wire
    schools and libraries, which critics have dubbed the \"Gore tax\"
    because of Vice President Al Gore\'s vigorous support of the
    program. The issue came to a head this week after long-distance
    companies said they would start adding about \$1 a month to
    consumers\' bills to fund the program.\"); *Phone Wars leave FCC in
    a Political Combat Zone*, The New York Times, August 13, 1998 at D-1
    (\"When a dispute arose over the commission\'s plan to raise money
    to subsidize internet connections for schools and libraries, the
    fees were immediately labeled the \"Gore tax\" on Capital Hill.\").

[^277]: Finally, I note that the timing of this Order is curious. It is
    no coincidence that the majority seeks to strengthen its ability to
    keep these taxes at arms-length at the same time that the
    Commissions is considering raising this tax by an additional \$1
    billion. *See, e.g.*, *FCC Mulls Boosting Internet Funding for
    Schools, Libraries*, Wall St. Journal, May 5, 1999, at B6.
    Association with this tax becomes increasingly damaging, as a
    political matter, the higher the tax is. Also, the act of
    substantially increasing the schools and libraries charge might well
    reinvigorate the debate over who should be blamed for this entire
    matter. *School Internet Discount Slated For More Money - and
    Dissension*, Washington Post, May 6, 1999 at E-3 (\"Yesterday\'s
    announcement may generate new controversy among telephone companies
    and Republican lawmakers who have called the program the \"Gore
    Tax\" because it is the vehicle for Vice President Gore\'s promise
    to wire all of America\'s classrooms to the Internet.\").

[^278]: Although the Order discusses the prohibition on terms such as
    \"federally-mandated\" in the specific context of the additional
    language that carriers may include, *supra* at para. 56., the
    underlying assumption of the Order seems to be that such a
    description would be equally unlawful if used as a label on a
    line-item. Under the reasoning of this Order, which concludes that a
    description of universal service charges as mandated by the federal
    government is misleading, it would seem that a line item conveying
    the same message would be an unreasonable practice in violation of
    section 201(b).

[^279]: In the 1980s, for instance, President Reagan and the Democratic
    Congress disagreed over whether his tax plan represented a cut in
    spending, as opponents of the plan thought, or merely a cut in the
    increase of spending, as he argued. Reasonable people could, and
    did, disagree about how the plan should be characterized. And yet
    what if government had restricted parties impacted by the proposal
    from calling it one thing or the other \-- requiring, for instance,
    that the plan only be referred to in certain documents as \"a cut in
    the increase of spending\"? That seems unthinkable, yet all too
    similar to the instant situation.

[^280]: By applying the three-part test from *Central Hudson*, the Order
    appears to presume that the speech at issue is not inherently but
    only potentially misleading. I think it open to challenge whether
    the speech at issue \-- *i.e.,* labels or descriptions such as
    \"FCC-mandated\" \-- are indeed potentially misleading. *See
    generally infra* at Section III. By assuming that the relevant
    speech is *at most* only *potentially* misleading, however, the
    Order does not deny that it is protected by the First Amendment.

[^281]: This same explanation is repeated for purposes of the first
    prong (the substantiality of the government\'s interest), and there
    it is phrased entirely in the conditional. \"Line item charges are
    being labeled in ways that *could* mislead consumers by detracting
    from their ability to fully understand the charges that are
    appearing on their monthly bills, thereby reducing their propensity
    to shop around for the best value.\" *Supra* at para. 60 (emphasis
    added). \"Consumers who are misled into thinking the charges are
    federally mandated . . . *could* decide that such shopping would be
    futile.\" *Id.* (emphasis added). \"Lack of standard labeling
    *could* make comparison shopping infeasible.\" *Id.* (emphasis
    added). The theoretical *possibility* of harm, of course, is not
    sufficient to justify a restriction on commercial speech, as noted
    above. The substantiality of the government\'s asserted interest is
    thus also quite vulnerable to attack.

[^282]: To the extent the Commission seeks to rely on the number of
    phone calls received from consumers as proof of \"confusion,\" *see
    supra* at para. 48 & n.29, that reliance is misplaced. The summary
    of complaints received does not distinguish between consumers who
    were confused by unclear charges and those disputing charges. My
    experience is that these consumers were not \"confused\" by the
    charges, nor were they under the misimpression that they could not
    shop around. Rather, they were angry about the imposition of what
    they perceived as a new federal tax. Moreover, this evidence does
    not adequately differentiate complaints about \"cramming\" and
    \"slamming\" from complaints about universal service charges.

[^283]: \"\[E\]xemptions from an otherwise legitimate regulation of a
    medium of speech may be noteworthy for a reason quite apart from the
    risks of viewpoint and content discrimination: They may diminish the
    credibility of the government\'s rationale for restricting speech in
    the first place.\" *City of Ladue v. Gilleo*, 512 U.S. at 52. *See
    infra* n. 7 (discussing weaknesses in substantiality of
    Commission\'s posited interest).

[^284]: Respectfully, I submit that the actual purpose of these
    regulations \-- and a theory on which the entire plan hangs together
    perfectly \-- is to discourage consumers from blaming this agency in
    particular or the federal government generally for this increase in
    telephone charges. *See generally infra* at Section III. Carriers
    who insist on breaking out the charges and listing them on a
    separate line, thereby bringing them to the attention of their
    customers, may only apply certain, government-approved labels to the
    charges, which discourages speech about the charges in the first
    instance. Other carriers, by simply including the charge in general
    rates, are free not to mention it at all. Either way, public
    discussion of the charges in bills is kept to a minimum; and, when
    the charges are discussed, they may not be closely tied to the
    federal government.

[^285]: Although the Commission relies on *Fox* in its Order, the
    interpretation of the fourth *Central Hudson* prong in that case was
    clarified in *City of Cincinnati,*as noted above. Moreover, in the
    subsequent case of *44 Liquormart, Inc. v. Rhode Island*, which
    produced no opinion for the Court, two Justices interpreted the
    fourth prong in an especially restrictive way, and one Justice would
    have jettisoned it altogether. *See* 517 U.S. 484, 524-25 (1996)
    (Thomas, J., concurring) (noting that application of fourth prong by
    Justices Stevens and O\'Connor was stricter than traditional
    application and that, if their approach were adhered to, it would
    invalidate \"restrictions on speech whenever a direct regulation . .
    . would be an equally effective method\" of advancing the
    government\'s end).

[^286]: For these reasons, the Order\'s attempt to distinguish *44
    Liquormart v. Rhode Island*, *see supra* at para. 63 (\"\[W\]e ban
    no speech, so carriers remain free to develop their own descriptions
    of the nature and purpose of these charges, subject only to a
    labelling requirement\"), is unpersuasive.

[^287]: Notably, the Order fails to explain why the reasons that counsel
    in favor of non-intervention on specific terminology when it comes
    to charges for services rendered are suddenly inapposite when it
    comes to universal services charges.

[^288]: The history of the underlying program and of carriers\' billing
    policies reveals a deeply political debate, ranging from matters
    such as the importance of internet access in schools and libraries
    to the impact of the program on potential presidential candidacies.
    *See generally infra* Part III (documenting background of program
    and billing policies); *see also* TIME, *Gore\'s Costly High Wire
    Ac*t, at 52, May, 25 1998 (\"What once seemed an unassailable idea
    is now ensnared in presidential politics, the byzantine working of
    phone deregulation and the design flaws of a funding scheme that
    camouflages the costs of a huge new federal program by putting it on
    people\'s phone bills.\").

[^289]: *See, e.g.*, USA Today, Shocked by e-taxes, May 5, 1999 at 26-A:
    \"The expenditure for computers is obscene. I want children to read,
    comprehend, write legibly with correct spelling and be able to add
    two and two without a calculator. . . . The wondrous part of all
    this is that a close look at your phone bill shows a charge on your
    long-distance calls to pay for this boondoggle. This is due to a tax
    instigated by Al Gore and the Federal Communications Commission. . .
    . My phone bill has a whole page of various little charges for
    nonsense. My base rate is \$28 before any long distance calls. Thank
    you, big government.\"

[^290]: The analogy to the Truth in Lending Act, *see supra* at para.
    62, does not prove very much. First, the fact that the Act has not
    been challenged as violative of the First Amendment does not
    establish its constitutionality. Second, the question whether that
    statute possesses the required fit between means and ends is one
    that turns, in part, on the particular characteristics of that
    legislative plan; the answer to that inquiry may well be different
    than the answer here. Last, that Act requires disclosure of
    objective, readily verifiable information, such as the applicable
    annual percentage rate for credit transactions and the way in which
    rates are calculated. Requiring disclosure of that kind of
    information is a far cry from compelling carriers to convey a
    politically freighted message that is biased against the carriers\'
    views. *Cf. Pacific Gas & Elec. Co. v. California*, 475 U.S. 1, n.
    12 (1986).

[^291]: The labeling regulations are troublesome under other strains of
    First Amendment precedent. First, they could fall as content-based
    restrictions, even if the speech at issue were found to be purely
    commercial. *R.A.V. v. City of St. Paul, Minnesota*, 505 U.S. 377
    (1992), suggests that content regulation of speech \-- even in the
    context of speech thought to be otherwise unprotected \-- can still
    invoke strict scrutiny. Specifically, if the government restricts
    speech not for reasons related to the nature of the speech but in
    order to impose special restrictions on \"those speakers who express
    views on disfavored subjects,\" strict scrutiny applies *Id.* at
    391; *see also id..* at 388‑89 (suggesting that regulation of
    advertising would fall within the rule of *RAV* in certain
    circumstances); *44 Liquormart v. Rhode Island*, 515 U.S. at 512 n.
    20 (noting that *RAV* held that \"although the government had the
    power to prescribe an entire category of speech, such as obscenity
    or fighting words, it could not limit the scope of its ban to
    obscene or fighting words that expressed a point of view with which
    the government disagrees\"). Here, the Commission has chosen to
    regulate as \"misleading\" only one subcategory of commercial speech
    on carriers\' bills \-- that relating to universal service charges
    which suggests the charges are federally required \-- thus limiting
    the scope of its ban to those who express a point of view about the
    nature of the charges with which the Commission disagrees.

    These rules also might be thought to impose a prior restraint on the
    speech of telephone companies. *See* *Bantam Books, Inc. v.
    Sullivan*, 372 U.S. 58, 70 (1963). Through this on-going rulemaking,
    companies must collectively \"pre-screen\" and vet their selection
    of line item descriptions with this agency, and those selections
    will ultimately be approved or rejected by the agency. In the D.C.
    Circuit, the applicability of prior restraint doctrine to commercial
    speech is an open question, *see Pearson v. Shalala*, 164 F.3d at
    660, and it clearly applies to core speech.

    In addition, these regulations could be void for overbreadth. *See
    generally Bigelow v. Virginia*, 421 U.S. 809 (1975). Because the
    Commission has chosen to restrict speech to the descriptions on its
    final list, it has by negative implication prohibited an entire
    class of descriptions that, while not on the approved list, are
    nonetheless truthful and non-misleading.

    Finally, the regulations could be unconstitutionally vague. *See NEA
    v. Finley,* 118 S.Ct. 2168, 2179 (1998) (\" The First and Fifth
    Amendments protect speakers from arbitrary and discriminatory
    enforcement of vague standards.\"*)* (citing *NAACP v. Button*, 371
    U.S. 415, 432‑433 )*.* The standard for speech prohibited as
    \"misleading\" is speech that \"state\[s\] or impl\[ies\] that the
    carrier has no choice regarding whether or not such a charge must be
    included on the bill or the amount of the charge.\" *Supra* at para.
    56. Needless to say, this standard is subjective, undefined, and
    vague, making it very difficult for regulated entities to know *ex
    ante* how they can safely describe the charges.