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