3 April 1998
Source: http://www.access.gpo.gov/su_docs/aces/aaces002.html

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[Congressional Record: April 1, 1998 (Senate)]
[Page S2968-S2987]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]
[DOCID:cr01ap98-168]


          STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

[Snip]

      By Mr. ROCKEFELLER (for himself, Ms. Snowe, and Mr. Kerrey):
  S. 1897. A bill to require accurate billing by telecommunications
carriers with respect to the costs and fees resulting from the
enactment of the Telecommunications Act of 1996, and for other
purposes; to the Committee on Commerce, Science, and Transportation.

                      THE CONSUMER protection act

  Mr. ROCKEFELLER. Mr. President, it took Congress a decade to forge
consensus necessary to pass the 1996 Telecommunication Act. This bold
law was designed to promote competition in the dynamic
telecommunications industry, but such competition is to be balanced by
maintaining the commitment to universal service, a fundamental
principle which has ensured affordable access to communications for
every American, especially those in rural areas.

  I voted for this historic legislation because in my view it struck
the right balance.
  I support competition, but I will insist on universal service.
  And I will insist on time to fully implement the Act. This bold law
seeks to move the $200 billion telecommunications industry to a more
competitive market, but it will not happen overnight. President Clinton
signed this major legislation into law in February 1998, just two years
ago. This started the telecommunications industry on the path toward
competition, but there have been some road blocks along the way with
implementation snags, mergers instead of competition, and excessive
litigation.
  The current result, unfortunately, is confusion.
  I do not want to reopen the Telecommunications Act, but I do want to
relieve the confusion among consumers who seem to be bearing the brunt
of this transition. Today, I am introducing bipartisan legislation
called the Consumer Protection Act to ensure ``truth in billing.'' I
believe that consumers deserve to have the truth, the whole truth about
changes in billings.
  As the telecommunications industry moves from a regulated,
monopolistic model into a more competitive model, we need to ensure
that consumers get the information they need to make wise decisions in
selecting their telecommunications carriers. In a regulated market, the
regulations are intended to protect consumers' interests. Under a more
competitive model, we need to ensure that accurate information is
provided to consumers so they can protect themselves and use their
ability to choose in the market place.
  This legislation is very simple. It directs the Federal
Communications Commission (FCC) and the Federal Trade Commission (FTC)
to investigate billing practices, and report on the findings to
Congress. If this investigation exposes misleading practices, we need
to have disciplinary action to protect consumers.
  If telecommunications companies choose to use line-items on phones
bills, those companies must accurately report all regulatory actions,
including how federal actions reduce costs, such as the $1.5 billion in
access reductions provided in July 1997.
  This legislation ensures that telecommunications companies cannot
selectively disclose only those pieces of information that are in the
companies' interest. When federal actions bring rates down, consumers
have the right to know. As the industry makes the transition to a more
competitive market, consumers deserve a full accounting so they can
make informed decisions when they choose their telecommunications
provider.
  The Consumer Protection Act will ensure that consumers will see on
their own bill how companies allocate savings resulting from
deregulation of the industry, as companies are required to disclose how
savings are passed along to residential rates, small business rates and
other customer payment

[[Page S2974]]

plans. This is not re-regulation. Nothing in this dictates how much
companies can charge for their services. And nothing prevents companies
from putting line items on bills. Those choices are still entirely at
the companies' discretion. This legislation simply requires them to
tell the whole truth if they choose to put a line item on customers
bills.
  The legislation has a third provision that requires companies using a
line-item on customer bills to file with the FCC all the revenue and
company reports they now file with the Securities and Exchange
Commission (SEC).
  The idea behind this requirement is simple. Since we require
companies to report their revenues to the SEC in order to protect
stockholders, shouldn't we provide the same information to the FCC in
order to protect consumers?
  During this period of transition from a monopoly-based system to a
market-based system, there will be some ups and downs. But we should
act to minimize confusion and protect consumers as the new market
evolves.
  At the state level, public service commissions are beginning to take
steps to provide fuller, more accurate information to consumers. In
January of this year, New York Administrative Law Judge Eleanor Stein
recommended that telecommunications carriers be required to disclose
fully, in bills of all classes of customers, the fee increases and fee
reductions resulting from the enactment of the 1996 Telecommunications
Act.
  In February the National Association of Regulatory Utility
Commissioners (NARUC) passed a resolution that clearly noted that line-
items are a business choice made by companies not a mandate from the
federal government. The NARUC resolution called on the FCC to take
action to require interstate carriers to provide accurate customer
notice and the purpose of line-items.
  Some state officials are taking action. NARUC is calling on the FCC
to lead. Now Congress needs to end the confusion, and tell consumers
the truth.
  I am proud that the Consumers Union supports this bipartisan
legislation. I welcome the support of my colleagues, Senator Snowe of
Maine and Senator Kerrey of Nebraska.
  Mr. President, I ask unanimous consent that the full text of the bill
be printed in the Record.
  There being no objection, the bill was ordered to be printed in the
Record, as follows:

                                S. 1897

       Be it enacted by the Senate and House of Representatives of
     the United States of America in Congress assembled,

     SECTION 1. FINDINGS; PURPOSE.

       (a) Findings.--Congress makes the following findings:
       (1) Billing practices by telecommunications carriers may
     not reflect accurately the cost or basis of the additional
     telecommunications services and benefits that consumers
     receive as a result of the enactment of the
     Telecommunications Act of 1996 (Public Law 104-104) and other
     Federal regulatory actions taken since the enactment of that
     Act.
       (2) Congress has never enacted a law with the intent of
     permitting providers of telecommunications services to
     misrepresent to customers the costs of providing services or
     the services provided.
       (3) Certain providers of telecommunications services have
     established new, specific charges on customer bills commonly
     known as ``line-item charges''.
       (4) Certain providers of telecommunications services have
     described such charges as ``Federal Universal Service Fees''
     or similar fees.
       (5) Such charges have generated significant confusion among
     customers regarding the nature of and scope of universal
     service and of the fees associated with universal service.
       (6) The State of New York is considering action to protect
     consumers by requiring telecommunications carriers to
     disclose fully in the bills of all classes of customers the
     fee increases and fee reductions resulting from the enactment
     of the Telecommunications Act of 1996 and other regulatory
     actions taken since the enactment of that Act.
       (7) The National Association of Regulatory Utility
     Commissioners adopted a resolution in February 1998
     supporting action by the Federal Communications Commission to
     require interstate carriers to provide accurate customer
     notice regarding the implementation and purpose of end user
     charges.
       (b) Purpose.--It is the purpose of this Act to require the
     Federal Communications Commission and the Federal Trade
     Commission to protect consumers of telecommunications
     services by assuring accurate cost reporting and billing
     practices by telecommunications carriers nationwide.

     SEC. 2. INVESTIGATION OF TELECOMMUNICATIONS CARRIERS BILLING
                   PRACTICES.

       (a) Investigation.--
       (1) Requirement.--The Federal Communications Commission and
     the Federal Trade Commission shall jointly conduct an
     investigation of the billing practices of telecommunications
     carriers.
       (2) Purpose.--The purpose of the investigation is to
     determine whether the bills sent by carriers to their
     customers accurately assess and correctly characterize any
     additional fees paid by such customers for telecommunications
     services as a result of the enactment of the
     Telecommunications Act of 1996 (Public Law 104-104) and other
     Federal regulatory actions taken since the enactment of that
     Act.
       (b) Determinations.--In carrying out the investigation
     under subsection (a), the Federal Communications Commission
     and the Federal Trade Commission shall determine the
     following:
       (1) The amount, if any, of additional fees imposed by
     telecommunications carriers on their customers as a result of
     the requirements of the Telecommunications Act of 1996
     (including the amendments made by that Act) and other Federal
     regulatory actions taken since the enactment of that Act
     during the period beginning on June 30, 1997, and ending on
     the date of enactment of that Act.
       (2) In the event that additional fees described in
     paragraph (1) are being imposed, the following:
       (A) Whether the amount of such fees accurately reflect--
       (i) the additional costs to carriers as a result of the
     enactment of that Act (including the amendments made by that
     Act) and other Federal regulatory actions taken since the
     enactment of that Act; and
       (ii) any reductions in costs, or other financial benefits,
     to carriers as a result of the enactment of that Act
     (including such amendments) and other Federal regulatory
     actions taken since the enactment of that Act.
       (B) Whether the bills that impose such fees characterize
     correctly the nature and basis of such fees.
       (c) Review of Records.--
       (1) Authority.--For purposes of the investigation under
     subsection (a), the Federal Communications Commission and the
     Federal Trade Commission may obtain from any
     telecommunications carrier any record of the carrier that is
     relevant to the investigation.
       (2) Use.--The Federal Communications Commission and the
     Federal Trade Commission may use records obtained under this
     subsection only for purposes of the investigation.
       (d) Disciplinary Actions.--
       (1) In general.--In the event that the Federal
     Communications Commission or the Federal Trade Commission
     determine as a result of the investigation under subsection
     (a) that the bills sent by a telecommunications carrier to
     its customers does not accurately assess or correctly
     characterize any fee addressed in the investigation, the
     Federal Communications Commission or the Federal Trade
     Commission, as the case may be, shall take such actions
     against the carrier as such Commission is authorized to take
     under law.
       (2) Additional actions.--If the Federal Communications
     Commission or the Federal Trade Commission determines that
     such Commission does not have adequate authority under law to
     take appropriate actions under paragraph (1), the Federal
     Communications Commission and the Federal Trade Commission
     shall notify Congress of that determination in the report
     under subsection (e).
       (e) Report.--Not later than 45 days after the date of
     enactment of this Act, the Federal Communications Commission
     and the Federal Trade Commission shall jointly submit to
     Congress a report on the results of the investigation under
     subsection (a). The report shall include the determination,
     if any, of either Commission under subsection (d)(2) and any
     recommendations for further legislative action that the
     Commissions consider appropriate.

     SEC. 3. REQUIREMENTS FOR TELECOMMUNICATIONS CARRIERS IMPOSING
                   CERTAIN FEES FOR SERVICES.

       (a) Requirements.--Any telecommunications carrier that
     includes on any of the bills sent to its customers a charge
     described in subsection (b) shall--
       (1) specify in the bill imposing such charge any reduction
     in charges or fees allocable to all classes of customers
     (including customers of residential basic service, customers
     of other residential services, small business customers, and
     other business customers) by reason of any regulatory action
     of the Federal Government; and
       (2) submit to the Federal Communications Commission the
     reports required to be submitted by the carrier to the
     Securities and Exchange Commission under sections 13(a) and
     15(d) of the Securities and Exchange Act of 1934 (15 U.S.C.
     78m(a), 78o(d)).
       (b) Covered Charges.--Subsection (a) applies in the case of
     the following charges:
       (1) Any specific charge included after June 30, 1997, if
     the imposition of the charge is attributed to a regulatory
     action of the Federal Government.
       (2) Any specific charge included before that date if the
     description of the charge is changed after that date to
     attribute the imposition of the charge to a regulatory action
     of the Federal Government.

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