FTC and FCC Issue Joint Policy Statement On Deceptive Advertising of Long Distance Telephone Services

The Federal Trade Commission (FTC) and Federal Communications Commission (FCC) today issued a joint Policy Statement to protect consumers from unfair and deceptive advertising and marketing of long distance services, including dial-around services -- often called "10-10" numbers. The Policy Statement offers guidance to carriers to ensure their advertising is truthful, complete and non-misleading. Additionally, it describes the kind of factors the FCC will consider in determining whether to bring enforcement action against carriers for deceptive advertising practices.

In recent years there has been an explosion in competition and innovation in the telecommunications industry. Consumers have reaped substantial benefits in the form of greater choice and lower prices. But the proliferation of advertisements for dial-around numbers, long-distance calling plans, and other new telecommunications services, as well as an increase in the number of complaints regarding how these services are promoted, have raised questions about how the principles of truthful advertising apply in this dynamic marketplace.

The Policy Statement issued today follows a joint forum held by the two federal agencies in November 1999, which provided government, industry, and consumer groups an opportunity to discuss the advertising and marketing of long distance services.

"This policy statement is a critical step in protecting the core rights of consumers in the competitive market which we have worked so hard to create. Together with truth in billing and freedom from slamming and cramming, it ensures that consumers will have the knowledge they need to select the carrier of their choice and be fairly charged for the services they use," said William Kennard, chairman of the FCC.

"This industry provides American consumers with telecommunications services that are the finest in the world," FTC Chairman Robert Pitofsky said. "This policy statement will help encourage industry to develop advertising that matches this high standard."

From the joint forum, the two federal agencies developed the FCC-FTC Policy Statement on Truth-in-Advertising, which offers the following guidance for truthful advertising of long distance services:

All claims must be 1) truthful; 2) non-misleading; and 3) substantiated; carriers should disclose all costs consumers may incur, such as per-call minimum charges, monthly fees, and universal service charges; advertising should disclose any time and/or geographic restriction on the availability of advertised rates; the basis for comparative price claims should be disclosed, and only current information used in making claims; and information should be disclosed in a clear and conspicuous manner, and without distracting elements so that consumers can understand it, and make fully informed choices.

The FCC has previously found that unfair and deceptive marketing practices by telephone companies may constitute unjust and unreasonable practices under the Communications Act. The joint Policy Statement issued today should provide helpful guidance to carriers who wish to adhere to lawful advertising practices.

In issuing this joint Policy Statement, the FTC and the FCC encourage industry to adhere to the standards offered in the joint Policy Statement. These standards provide guidance for carriers who market long-distance service. Staff of both FTC and FCC remain open to discussing long-distance advertising concerns and any questions that others may have on the Policy Statement itself or more generally. Additionally, the joint Policy Statement does not preempt existing state law.

The Commission vote to approve the release of the joint guidelines was 5-0.

Copies of the documents mentioned in this release are available from the FTC's web site at http://www.ftc.gov and also from the FTC's Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580; 877-FTC-HELP (877-382-4357); TDD for the hearing impaired 1-866-653-4261. To find out the latest news as it is announced, call the FTC NewsPhone recording at 202-326-2710.

A consumer publication, "Making Sense of Long-Distance Advertising," is also available.

(FTC File No. P974405)
(Long Distance.final.wpd)