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Federal Communications CommissionFederal Communications Commission2010 National Association of State Utility Consumer Advocates Mid-Year 2010 National Association of State Utility Consumer Advocates Mid-Year

MeetingMeetingMarriott San Francisco Fisherman’s WharfMarriott San Francisco Fisherman’s Wharf

San Francisco, CaliforniaSan Francisco, CaliforniaJune 14, 2010June 14, 2010

Joel Gurin, ChiefJoel Gurin, ChiefConsumer and Governmental Affairs BureauConsumer and Governmental Affairs Bureau

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FCC Mission and GoalsFCC Mission and Goals• Independent federal agency charged with regulating Independent federal agency charged with regulating

interstate and international communications by interstate and international communications by radio, radio, television, wire, satellite and cableradio, radio, television, wire, satellite and cable

• Strategic Goals for 2010 and BeyondStrategic Goals for 2010 and Beyond• BroadbandBroadband• ConsumersConsumers• Competition and InnovationCompetition and Innovation• Continual ImprovementContinual Improvement• Public Safety and Homeland SecurityPublic Safety and Homeland Security• InternationalInternational

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The Consumer & Governmental Affairs Bureau: The Consumer & Governmental Affairs Bureau: Who are we?Who are we?

• Mission: To serve as the “public face” of the Mission: To serve as the “public face” of the Commission for the American consumer.Commission for the American consumer.

• RolesRoles• Educate and inform consumers about telecommunications Educate and inform consumers about telecommunications

goods and servicesgoods and services• Develop and implement the Commission’s consumer Develop and implement the Commission’s consumer

policiespolicies• Develop and maintain partnerships with consumer and Develop and maintain partnerships with consumer and

industry groups and federal, tribal, state and local industry groups and federal, tribal, state and local government entities regarding telecommunications policy government entities regarding telecommunications policy issuesissues

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Guiding Principles for CGB EffortsGuiding Principles for CGB Efforts

Promote and facilitate the FCC’s work Promote and facilitate the FCC’s work to protect consumers through -- to protect consumers through -- • InformationInformation•Transparency and DisclosureTransparency and Disclosure•OutreachOutreach

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CrammingCramming

• ““Cramming” refers to the inclusion of Cramming” refers to the inclusion of unauthorized chargesunauthorized charges on a consumer’s on a consumer’s telephone bill.telephone bill.

• Two potential originating sources for Two potential originating sources for unauthorized charges unauthorized charges • Consumer’s own telephone companyConsumer’s own telephone company• Third party vendorThird party vendor

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CrammingCramming

Impact on ConsumersImpact on Consumers

• A consequence of cramming is that a consumer is billed, and often pays, for unauthorized charges

• Some consumers may continue to be crammed over an extensive period of time

• Each complaint represents potentially hundreds or thousands of other consumers who may not recognize that they have been crammed for similar charges.

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CrammingCramming

Best Practices Guidelines to Protect Consumers from Cramming

• Bills should be comprehensible, complete and include Bills should be comprehensible, complete and include information the consumer may need to discuss and, if information the consumer may need to discuss and, if necessary, dispute charges.necessary, dispute charges.

• Consumers should be provided with options to control Consumers should be provided with options to control whether or not a third party’s products and services are whether or not a third party’s products and services are charged on their telephone bills.charged on their telephone bills.

• Consumer authorization of services ordered should be Consumer authorization of services ordered should be appropriately verified.appropriately verified.

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CrammingCramming

Best Practices Guidelines to Protect Consumers from Cramming (cont’d)

• Local exchange carriers (LECs) should screen products, Local exchange carriers (LECs) should screen products, services, and third party service providers prior to services, and third party service providers prior to approval for inclusion on the telephone bill. approval for inclusion on the telephone bill.

• Clearinghouses that aggregate billing for third party Clearinghouses that aggregate billing for third party customers and submit that billing to LECs should ensure customers and submit that billing to LECs should ensure that only charges that have been authorized by the that only charges that have been authorized by the customer will be included.customer will be included.

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CrammingCramming

Best Practices Guidelines to Protect Consumers from Cramming (cont’d)

• LECs should continue to educate consumers as to their LECs should continue to educate consumers as to their rights and the process for resolution of disputes.rights and the process for resolution of disputes.

• Each LEC should provide appropriate law enforcement, Each LEC should provide appropriate law enforcement, regulatory agencies, and other LECs with various regulatory agencies, and other LECs with various categories of data to assist in controlling cramming. categories of data to assist in controlling cramming.

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Cramming: Overview of Federal Regulatory Cramming: Overview of Federal Regulatory LandscapeLandscape

1.1. Truth-in-Billing Rules and DecisionsTruth-in-Billing Rules and Decisions

2.2. Consumer Information and Disclosure NOIConsumer Information and Disclosure NOI

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Truth-in-Billing Rules and DecisionsTruth-in-Billing Rules and Decisions

Overview of the Truth-in-Billing OrdersOverview of the Truth-in-Billing OrdersFirst Truth-in-Billing OrderFirst Truth-in-Billing Order

[[Truth-in-Billing and Billing FormatTruth-in-Billing and Billing Format, First Report and Order and Further Notice of Proposed , First Report and Order and Further Notice of Proposed Rulemaking, CC Docket No. 98-170, 14 FCC Rcd 7492 (1999)]Rulemaking, CC Docket No. 98-170, 14 FCC Rcd 7492 (1999)]

• Truth-in-billing principles (codified at section Truth-in-billing principles (codified at section 64.2401 of the Commission’s rules) require that consumer 64.2401 of the Commission’s rules) require that consumer bills:bills:

• be clearly organized, clearly identify the service provider, and be clearly organized, clearly identify the service provider, and highlight any new providers;highlight any new providers;

• contain full and non-misleading descriptions of charges that contain full and non-misleading descriptions of charges that appear therein; and appear therein; and

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

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Truth-in-Billing Rules and DecisionsTruth-in-Billing Rules and Decisions

Overview of the Truth-in-Billing Orders (cont’d)Overview of the Truth-in-Billing Orders (cont’d)Second Truth-in-Billing OrderSecond Truth-in-Billing Order

[[Truth-in-Billing Format; National Association of State Utility Consumer Advocates’ Petition Truth-in-Billing Format; National Association of State Utility Consumer Advocates’ Petition for Declaratory Ruling Regarding Truth-in-Billingfor Declaratory Ruling Regarding Truth-in-Billing, CC Docket No. 98-170, CG Docket No. , CC Docket No. 98-170, CG Docket No. 04-208, Second Report and Order, Declaratory Ruling, and Second Further Notice of 04-208, Second Report and Order, Declaratory Ruling, and Second Further Notice of Proposed Rulemaking, 20 FCC Rcd 6448 (2005)]Proposed Rulemaking, 20 FCC Rcd 6448 (2005)]

• Applied requirement that billing descriptions be brief, clear, non-Applied requirement that billing descriptions be brief, clear, non-misleading and in plain language to Commercial Mobile Radio Service misleading and in plain language to Commercial Mobile Radio Service (CMRS) carriers(CMRS) carriers

• Proposed additional measures to provide consumers with clear Proposed additional measures to provide consumers with clear information on their bills because there was still consumer confusion information on their bills because there was still consumer confusion about their bills.about their bills.

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Consumer Information and Disclosure NOIConsumer Information and Disclosure NOI

Notice of InquiryNotice of Inquiry(CG Docket No. 09-158; CC Docket No. 98-170; WC (CG Docket No. 09-158; CC Docket No. 98-170; WC

Docket No. 04-36)Docket No. 04-36)

• Goal: Identify opportunities to protect and empower Goal: Identify opportunities to protect and empower American consumers by ensuring sufficient access to American consumers by ensuring sufficient access to relevant information about communications services.relevant information about communications services.

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Consumer Information and Disclosure NOIConsumer Information and Disclosure NOI

Underlying Reasons for ProceedingUnderlying Reasons for Proceeding

• Evolution of communications marketplace -- new categories of Evolution of communications marketplace -- new categories of services and new pricing plansservices and new pricing plans

• Continued consumer confusion regarding bills for communications Continued consumer confusion regarding bills for communications servicesservices

• New opportunities to improve the kind and degree of information New opportunities to improve the kind and degree of information available to consumers presented by technology advancementsavailable to consumers presented by technology advancements

• Desire to build a factual record whether pro-consumer goals can be Desire to build a factual record whether pro-consumer goals can be accomplished through policies addressing information disclosureaccomplished through policies addressing information disclosure

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Consumer Information and Disclosure NOIConsumer Information and Disclosure NOI

Importance of Consumer Access to Accurate InformationImportance of Consumer Access to Accurate Information

• Serves critical function in maintaining a well-functioning Serves critical function in maintaining a well-functioning marketplace that encourages competition, innovation, low marketplace that encourages competition, innovation, low prices and high quality servicesprices and high quality services

• Empowers consumers by allowing them to choose services Empowers consumers by allowing them to choose services best aligned with their needs and budgetsbest aligned with their needs and budgets

• Protects consumers from unanticipated charges and helps Protects consumers from unanticipated charges and helps them identify and avoid products and services that fall short them identify and avoid products and services that fall short of their expectationsof their expectations

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Consumer Information and Disclosure NOIConsumer Information and Disclosure NOI

Overview of Issues AddressedOverview of Issues Addressed

• Whether existing truth-in-billing rules and/or consumer information-Whether existing truth-in-billing rules and/or consumer information-related rules should be applied to services other than wireline and related rules should be applied to services other than wireline and wireless voice services (such as broadband Internet access service and wireless voice services (such as broadband Internet access service and subscription video services)subscription video services)

• Whether consumers need information displayed in a consistent format Whether consumers need information displayed in a consistent format that allows them to compare their current service with the new and that allows them to compare their current service with the new and increasing offerings of other providersincreasing offerings of other providers

• What type of information helps consumers assess the service quality What type of information helps consumers assess the service quality being offered by each provider and the different dimensions of servicebeing offered by each provider and the different dimensions of service

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Consumer Information and Disclosure NOIConsumer Information and Disclosure NOI

Overview of Cramming Issues AddressedOverview of Cramming Issues Addressed

• The Commission sought comment on the extent to which cramming The Commission sought comment on the extent to which cramming remains a problem for consumers and why .remains a problem for consumers and why .

• The Commission sought comment on what lessons it could learn from The Commission sought comment on what lessons it could learn from past experiences of other government agencies to deal with cramming, past experiences of other government agencies to deal with cramming, such as the Federal Trade Commission and state authorities.such as the Federal Trade Commission and state authorities.

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Consumer Information and Disclosure NOIConsumer Information and Disclosure NOI

Overview of Cramming Issues AddressedOverview of Cramming Issues Addressed• Data RequestData Request: Sought specific empiric and quantifiable information about : Sought specific empiric and quantifiable information about

the kinds of unauthorized charges that appear on consumers’ telephone the kinds of unauthorized charges that appear on consumers’ telephone bills, and how such charges are presented on the bill. Are the charges bills, and how such charges are presented on the bill. Are the charges easily detected? easily detected?

• Industry EffortsIndustry Efforts: Expressed interest in data from industry about the : Expressed interest in data from industry about the complaints they receive from subscribers and what steps they have taken complaints they receive from subscribers and what steps they have taken to address such unauthorized charges. Are there additional measures to address such unauthorized charges. Are there additional measures industry can or should take to reduce incidences of cramming, including a industry can or should take to reduce incidences of cramming, including a review of the anti-cramming best practices developed in 1998? review of the anti-cramming best practices developed in 1998?

• Billing PracticesBilling Practices: Sought information on billing activities of CMRS carriers, : Sought information on billing activities of CMRS carriers, including whether, and if so, how, they include charges for services including whether, and if so, how, they include charges for services rendered by third parties. The Commission sought comment on how rendered by third parties. The Commission sought comment on how providers currently present consumer information and on best practices providers currently present consumer information and on best practices for the display and formatting of consumer information.for the display and formatting of consumer information.

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Consumer Information and Disclosure NOIConsumer Information and Disclosure NOI

What does the record received in response to What does the record received in response to the NOI tell us?the NOI tell us?

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Consumer Information and Disclosure NOIConsumer Information and Disclosure NOI

Snapshot of Government and Consumer Group Snapshot of Government and Consumer Group CommentsComments

• Require the billing carrier to offer customers the Require the billing carrier to offer customers the option to block third-party billing;option to block third-party billing;

• Require common carriers to undertake due Require common carriers to undertake due diligence measures to screen third party service diligence measures to screen third party service providers before permitting them to place charges providers before permitting them to place charges on their telephone bill;on their telephone bill;

• Enhance cooperation among law enforcement Enhance cooperation among law enforcement entities including sharing of complaints among entities including sharing of complaints among state and federal regulators;state and federal regulators;

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Consumer Information and Disclosure NOIConsumer Information and Disclosure NOI

Snapshot of Government and Consumer Group Snapshot of Government and Consumer Group Comments (cont’d)Comments (cont’d)

• Clarify that cramming includes not only Clarify that cramming includes not only unauthorized charges on LEC bills but also unauthorized charges on LEC bills but also unauthorized charges that appear on other unauthorized charges that appear on other telephone bills; andtelephone bills; and

• Require that third party billers be identified and Require that third party billers be identified and provide their contact information on the provide their contact information on the telephone bill.telephone bill.

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Consumer Information and Disclosure NOIConsumer Information and Disclosure NOI

Snapshot of Industry Comments• Carriers are sufficiently motivated to protect their Carriers are sufficiently motivated to protect their

own subscribersown subscribers• Sufficient safeguards are currently in placeSufficient safeguards are currently in place

• Compliance with state and federal lawsCompliance with state and federal laws• Corrective measures taken against problem billersCorrective measures taken against problem billers• Pre-screening and monitoringPre-screening and monitoring• Blocking optionsBlocking options• Rapid resolution of complaintsRapid resolution of complaints

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CrammingCramming

The Road Ahead -- What’s Next?The Road Ahead -- What’s Next?

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