Pay-Per-Call Rule Review: Response to Notice of Proposed Rulemaking: 16 C.F.R. Part 308, FTC File No. R611016 #20

Submission Number:
Kathryn Marie Krause
U.S. West, Inc
Initiative Name:
Pay-Per-Call Rule Review: Response to Notice of Proposed Rulemaking: 16 C.F.R. Part 308, FTC File No. R611016
Matter Number:


U S WEST, Inc.
1801 California Street, Suite 5100
Denver, Colorado 80202
303 672-2859
Facsimile 303 295-6973

Kathryn Marie Krause
Senior Attorney

March 10, 1999

Office of the Secretary
Federal Trade Commission
Room 159
600 Pennsylvania Avenue, N.W.
Washington, DC 20580

RE: Pay-Per-Call Rule Review-Comment. FTC File No. R611016.


U S WEST Communications, Inc. ("U S WEST") herein responds(1) to the Federal Trade Commission's ("FTC" or "Commission") proposed rule changes that will apply the principles of the Commission's current 900 Number Rule(2) to other service offerings.(3) As a general matter, U S WEST supports those regulatory initiatives that materially improve the 900 or pay-per-call marketplace as that marketplace is experienced by consumers. Thus, to the extent there remain persistent abuses in that marketplace, they should be corrected. And, as the Commission has observed, to a limited extent Congress has provided the Commission with greater authority to engage in such corrections.(4)

The Commission's proposals, however, go way beyond the 1996 Congressional expression of intent regarding pay-per-call service regulation or regulation of "similar services." The proposals seek to fundamentally change a material statutory definition, i.e., "telephone-billed purchase," in a manner neither contemplated nor endorsed by Congress. Furthermore, certain of the proposals inappropriately impose strict liability on billing agents. Categorizing actions over which an entity has no control as a "deceptive billing practice" (rather than a deceptive trade practice by the service provider) simply confuses the natural lines of service provisioning and customer satisfaction and assures that billing for these types of services will get more and more expensive to cover the cost of expanded liability. U S WEST does not believe that such is in the public interest.

The scope of the Commission's proposals implicate U S WEST's business activities in two different capacities. First, as a billing entity for others' 900 or non-telecommunications services (i.e., engaging in "third-party billing"). Second, as a vendor providing services (some of which are unregulated) and subsequently billing for those services. U S WEST is concerned about the application of the proposed rules in both capacities.

U S WEST opposes the Commission's proposed extension of the definition of "telephone-billed purchase." Contrary to the explicitly expressed Congressional intent granting the Commission the authority to extend the term only to similar types of services and then only if such services create the same type of potential market harm, in its proposals the Commission inappropriately extends the definition to include basically all non-telecommunications services billed on a telephone bill, even if a phone call was never even part of the commercial transaction. This proposed extension is not only contrary to the statutory mandate but sound public policy, as well. Below, U S WEST addresses this matter further. We argue that the Commission should not extend the definition of "telephone-billed purchase" as it proposes. However, if the Commission does proceed down this road, we argue that the scope of its rule should only run to a business entity's billing for the non-telecommunications services of third parties - not its own services.

Below, we also address the FTC's proposal to do away with the current "annual notification" alternative for providing individuals notice of their billing/dispute disclosure rights under the Telephone Disclosure and Dispute Resolution Act of 1992 ("TDDRA") and current Commission rules. U S WEST currently utilizes the annual notice with respect to compliance requirements. A different, i.e., a monthly¸ notification model would significantly increase costs. While U S WEST would expect to recover those costs (in part through allocations to carriers benefiting from the notification), we question whether the cost increase is warranted.

U S WEST also addresses the Commission's proposed allocation of compliance obligations, to the extent the Commission proposes to modify its existing rules to broaden the scope of direct liability to billing agents.(5) The extension of these obligations imposes problems because, in a number of instances, the billing entity is not in a position to know that the service provider is not complying with the rules. This lack of scienter creates a model whereby the Commission is imposing strict liability on the billing agent and terming that liability a "deceptive billing practice." This model will clearly increase marketplace costs, as billing agents seek to insulate themselves from liability (including class action liability) and harm to their reputations. It might even result in entities deciding to exit the business rather than be tarnished with the approbation of having acted "deceptively." However, to the extent the Commission remains resolute in its allocation of compliance responsibilities, the Commission should make explicit that billing entities are not required to comply with the rules "for free." That is, it must be clear that associated costs of compliance can be recovered from those whose existence give rise to the compliance obligations in the first instance, i.e., the service providers or vendors.

Next, we comment on the FTC's proposed "regulation" of the relationship between a billing entity -- such as a local exchange carrier ("LEC") -- and a vendor of audiotext or other services or the billing aggregator serving the vendor's direct billing needs. There is nothing in the 1996 Act that suggests that Congress intended the Commission to become involved in regulating the specifics of those relationships, including the provision of information from the LEC to the vendor or billing aggregator. Thus, we believe this aspect of the proposed rule is ill advised and should not be adopted by the Commission.

Finally, we present some short comments on matters where the NPRM makes an erroneous assumption of law, fact or context. We believe the correction of the error will result in a better crafted rule than if the matter were not brought to the Commission's attention.

Expansion of Definition of "Telephone-Billed Purchase"

As stated above, the Commission proposes to expand the term "telephone-billed purchase" far beyond that anticipated by Congress. When Congress granted the Commission the authority to expand the pay-per-call rules, it explicitly restricted the exercise of that authority to services that were similar to pay-per-call services and that presented the same type of potential for marketplace unfairness and deception. The way the Commission proposes to expand the definition of "telephone-billed purchase" ignores these limitations.

Not all non-telecommunications services billed on a telephone bill are comparable to pay-per-call services, which generally involve the delivery of information or entertainment via the technology of a telephone connection. The information/entertainment "purchased solely as a consequence of the completion of the call . . . or comparable action of the caller,"(6) is the essence of the "pay-per-call transaction."

The Commission would ignore this essential component, however, and extend the definition of "telephone-billed purchase" to any purchase billed on a telephone bill, even if a telephone was never involved in securing the goods or services.(7) Such an extension has no foundation in any Congressional grant of authority. Congress did not grant the Commission general jurisdiction over the billing of non-telecommunications services on a carrier's bill. Thus, despite the best of intentions, the Commission lacks jurisdiction to address the matter of "cramming" as a general matter.(8) For this reason alone, the Commission should reject this proposal.

Moreover, however, insinuation by this Commission into the general matter of "cramming" is unnecessary. There is significant self-regulatory activity going on in this area(9) such that this unscrupulous conduct will become less and less prevalent in the marketplace.

However, should the Commission remain resolute in its position that it has jurisdiction to extend its rules as it proposes, the Commission should not construe its proposed rules to apply to a carrier's billing of its own services, whether those services are regulated in a traditional utility fashion (e.g., local exchange, toll)(10) or constitute "enhanced" or "information services,"(11) such as voice mail, fax store and forward, Internet access. Excluding the billing(s) of carriers for their own non-telecommunications services is consistent with comparable commercial practice, customer expectations, and Congressional concern. Thus, the Commission should make such exclusion explicit in its Order and finally-promulgated rules.

The Commission should articulate that, contrary to some language in the NPRM that might be read to suggest otherwise, (12) the marketplace potential for unfairness and deception does not require an extension of the rules to a carrier's billing of its own non-telecommunications (or deregulated telecommunications) services to its own customers.(13) Such an interpretation is consistent with Congressional intent, credit card practice and current market conditions.(14)

The failure to differentiate between the carrier-supplier and third-party types of charges discussed above would extend the Commission's proposed regulatory regime far beyond any fair reading of Congressional intent(15) and insinuate itself into a realm traditionally regulated, if at all, by state regulatory authority. Furthermore, such situation would ignore the fact that non-telecommunications services have for over a decade been billed by carriers to their own subscribers with no demonstrated consumer harm. Nothing about the TDDRA or the 1996 Act suggests that Congress meant to grant this Commission authority over such billing activity.(16) The facts, as well, do not compel the conclusion that TDDRA-type protections need to be accorded customers within a carrier/customer relationship since there is no evidence that current billings for such services "undermine the rights of consumers or otherwise operate to destroy the credibility and confidence that consumers and vendors have come to expect."(17)

For all of the above reasons, the Commission should reject its proposal to expand the definition of the term "telephone-billed purchase" as it proposes. Even if it does proceed with some expansion of the definition, however, it should limit the extension to the billing of third-party products and services.

Direct Application of Rules to Billing Entities

The NPRM notes, in a number of particulars, that the current 900 Number Rule is proposed to be modified to make compliance obligations directly applicable to "billing entities."(18) For example, the NPRM notes that proposed Section 308.17, dealing with the need for express authorization, "applies directly to billing entities."(19) And, in discussing the applicability of the rules generally, the NPRM notes that "Section 308.7(o)(2) of the original Rule" is being revised to make clear that "all billing entities are under an obligation to comply with the proposed Rule's requirements, regardless of which entity is designated to give disclosures and respond to billing error notices."(20)

The imposition of this type of liability without fault(21) is not sound as a matter of law or public policy. For example, a single complaint to a billing entity carrier really cannot realistically raise an implication that numerous customers "were likely to have been" improperly billed.(22) Nor should this Commission find that such a single complaint would create such an implication. Furthermore, carrier billing agents will never be in a position to know if the billing items passed to it as tariffed utility charges are bone fide tariffed charges or pay-per-call charges.(23)

To protect against these kinds of "unlawful" acts, carrier billing agents undoubtedly all have in their contracts provisions requiring the principal to comply with all laws, rules and regulations. And, undoubtedly, there are indemnification provisions. But these types of contractual provisions are meant to protect a billing entity against derivative - not direct - liability.

The imposition of direct liability on a billing agent, i.e., the declaration that such entities are engaged in "deceptive billing practices" when certain phenomena occur, is a chilling regulatory model. The harm to a billing agent's reputation that such declaration might cause can lead a billing agent to rethink being in the business. Such decisions, particularly if widespread, might increase the overall billing costs to the marketplace. It is doubtful if this is in the public interest. For these reasons, the Commission should rethink its compliance obligations and their application.

However, to the extent that billing agents incur any implementation costs to comply with the Commission's rules - whether those costs are derivative or direct - the Commission should make clear that a billing entity is entitled to recover compliance costs from those whose business is the fundamental "cost causer" of the regulatory obligation, i.e., the vendor. In the past, vendors and service bureaus/billing aggregators have argued that "direct application" of the 900 rules to billing entities means that they must "absorb" the costs of compliance and not pass those costs on. This is hogwash and the Commission should make certain that no such "misunderstanding" is permitted to persist at the termination of this proceeding. The Commission should make explicit that the direct application of a Commission rule to an entity does not mean the entity must perform the obligation for free or forego cost recovery from those "cost causers" who generated the need for the cost expenditure in the first instance.

Elimination of "Annual Notification" Alternative

The proposed rules would eliminate the ability of entities to provide notice to individuals of their TDDRA rights, as amended and articulated by the FTC's rules, through an annual notice. Claiming that it is unaware of many instances where an annual statement was utilized in any event,(24) the NPRM proposes that billing dispute disclosure information be provided every month where a charge incorporated in the underlying rule (i.e., a "telephone-billed purchase," which would include a pay-per-call transaction) appears on the customer's bill.

U S WEST is not aware of what information the FTC has that causes it to believe that annual notices are not being utilized by carriers,(25) since U S WEST uses an annual notice as the compliance vehicle with respect to the existing 308.7(n). A copy of that notice is attached to this filing for the Commission's easy perusal. Based on the costs associated with moving from an annual notice model to a monthly model of customer notification, we strongly oppose the elimination of the annual notification alternative.

U S WEST currently provides the information required to be disclosed to customers under 308.7(n) through an annual bill insert, printed on the front and back pages and running a number of paragraphs. This type of "notice" should not have to be printed on every bill for every customer who purchases a pay-per-call or other telephone-billed purchase. And, if such a requirement is imposed, it should be imposed with the knowledge that there will be significant added cost to provide this type of notification.(26)

Currently, the mailing of the annual notice runs about $53,000 and is sent to U S WEST's entire customer base. To provide this type of notice every month on the 1.3 million bills printed by U S WEST would involve a start-up cost alone in the area of $53,000(27) with a monthly recurring cost of around 5.25 cents per customer (to accommodate about 60 lines of text). This would result in an estimated total recurring annual cost of $819,000. Clearly, this is a significant increase in cost. The public benefit that might be derived from the monthly, rather than the annual, notification does not seem so substantial as to warrant this significant increase.

Furthermore, U S WEST's Easy Bill format is a duplex format that does not accommodate printing on the "back of the bill." Thus, a method would have to be devised to mark the pay-per-call and/or other telephone-billed purchase items to alert the subscriber to go to the "Notice Page" at the end of the bill. This would be a costly endeavor. The alternative - which would be even more costly - would be for the disclosures to appear on each vendor's bill page for each type of service.(28)

Even though U S WEST would expect full recovery of any costs associated with converting the current 308.7(n) notification from an annual one to a monthly one under proposed 308.20(b) (see discussion immediately below), we believe the better cost/benefit analysis is to allow flexibility in this area as the current rule does. U S WEST encourages the Commission to adopt such an approach.


The NPRM states that a number of audiotext vendors "report difficulty collecting valid 900-number charges from consumers" and that "when LECs are unsuccessful in collecting these legitimate charges, the vendors have great difficulty in obtaining the information they need to collect the charges on their own."(29) Apparently, to respond to such complaints, the NPRM notes that the Commission is proposing "[n]ew time limits within which the investigation must be conducted[,]"(30) through "modifications to Section 308.7 of the original Rule (now proposed Section 308.20)."(31)

The Commission proposes to circumscribe the time that a LEC (billing entity) has to conduct an investigation regarding a billing dispute (i.e., allegation of a billing error) from 90 to 60 days. (Of course, if a LEC does no investigation but merely agrees to the removal of the disputed charge from the bill (see discussion below), this circumscription should pose little problem.) Next, once the LEC has taken some type of decisive action, it has 30 days to provide the relevant billing/subscriber information to the vendor/service bureau/billing aggregator. Additionally, the Commission proposes a new rule Section 308.20(n)(4) requiring that billing entities advise vendors/service bureaus/billing aggregators within 120 days of those individuals who refuse to pay billed charges while not pursuing a formal "billing error/dispute process."

While U S WEST could probably live with the proposed requirements, we question the Commission's jurisdiction to enact such intra-commercial entity rules. While there might be some relationship between a LEC's contractual relationship with a third party and the confidence of the consumer market, we believe the linkage to be fairly attenuated. For this reason, and in light of no affirmative Congressional mandate that the Commission insinuate itself into this area, we recommend the Commission not enact rules in this area.

Miscellaneous Short Comments

Proposed Addition of the Word "Tariffed" to Section 308.2(g)(3)(iii)

The NPRM proposes to add the word "tariffed" to a portion of the current rule language providing for exemptions to the definition of "pay-per-call,"(32) specifically the exemption currently accorded "directory assistance" services provided by common carriers or their affiliates.(33) The Commission's proposal is misplaced as a matter of law and policy.

As a matter of law, Congress has already exempted certain "directory assistance" services from the "pay-per-call" definition. The extension of authority granted the Commission by Congress in 1996 does not grant the Commission the authority to limit or change the previously-granted exemptions. Thus, the Commission is without such authority.

Moreover, the change proposed by the Commission is unnecessary as a matter of policy, as well. Noting that the current rule tracks the statutory language, the NPRM states that the word "tariffed" is proposed to be added "to clarify the meaning of the exemption, and to prevent unscrupulous vendors from seeking to abuse the exemption."(34) However, the Commission points to no evidence that any such abuse is occurring or anticipated.

Additionally, inserting the word "tariffed" will only insert an unnecessary element of confusion into an otherwise clearly articulated Congressional exemption. At both the federal and state levels, regulatory authorities are increasingly circumscribing those service offerings subject to formal tariff. (Sometimes this circumscription takes the form of a mandate to refrain from filing tariffs; sometimes it simply allows companies to file, or not file, at their discretion.) Thus, inserting the word "tariffed" will simply produce a static rule often lacking relevance to a dynamic regulatory environment. The Commission should not adopt this proposal.

Access to Information and Definition of "Service Bureau"

While the NPRM proposes to modify Section 308.19 in only certain particulars,(35) U S WEST takes this opportunity to express concern not only about the modification but the wording of the current rule, as well. It seems obvious that what the FTC is attempting to do is gain information about the vendor or service bureau/billing aggregator's relationship with the LEC as it pertains to the billing contract. Therefore, the rule should be so constrained.

It is not enough to exempt out the vendor's/service bureau's use of local exchange services because such entities also consume other telecommunications services (such as intrastate toll) and non-telecommunications services (such as voice mail, CPE and Internet access) in their capacity as "customers." This would be analogous to the types of administrative services purchased by an interexchange carrier as opposed to the purchase of "access."

As a general rule, U S WEST would require a governmental entity to secure information about such service provisioning only through some sort of legal process, e.g., a court order or administrative subpoena. U S WEST sees no sound reason why the FTC, by rule, should be permitted to grant itself unfettered access to such information.

The only information the FTC should have access to should be the information pertaining to the billing agreement and arrangement. And, since these types of services are not telecommunications services, the Commission should modify its rule to more accurately describe the information that it might desire to access (i.e., "records and financial information relating to arrangements with vendors of other telephone-billed goods or services, as well as to arrangements with service bureaus")(36) and that carriers might be required to provide.

In a related vein, the Commission's definition of "service bureau" means "[a]ny person, including a common carrier, who provides one or more of the following services to vendors: voice storage, voice processing, call processing" etc.(37) A carrier should not be converted to a service bureau simply because it provides voice storage or voice processing (essential elements of voice mail) or call processing to vendors. That is, a vendor, Mr. Joe Smith, should be able - like any other customer of U S WEST - to have his telecommunications calls "processed" or to purchase voice mail without U S WEST's being converted, as a result of that service offering and provisioning, into a "service bureau." The Commission needs to better craft the definition of "service bureau" to get at the material elements of "vendorship" with respect to the marketplace transactions it seeks to regulate.

"Foregiveness" of Charges

The Commission should be aware of a generally-adopted practice of "credit issuance" by LECs that bill for others. For example, if a customer contacts U S WEST and alleges that a charge is "unauthorized," U S WEST offers to "take the charge off the bill," but advises that those who directed the placement of the charge on the bill might still pursue collection action. The action taken by U S WEST is not - in our opinion - a "forgiveness" of charges, since other parties remain free to pursue collection action and U S WEST advises the customer of that fact. However, such action seems to be a "forgiveness" under the NPRM's use of that term.(38)

While U S WEST has no problem with the substantive aspect of the proposed Section 308.20.(n)(2), we believe it appropriate to apprise the Commission of our position regarding the term "forgiveness." In its final Order, the Commission should make clear the difference between a "credit issuance" and a "forgiveness," allowing either one to be taken as long as the customer is clearly advised which action is being taken and where, if a credit issuance alone is being done by a LEC, the vendor/service bureau assumes the responsibility for the requisite investigation associated with the customer's dispute.


The Commission should issue final rules that align themselves more faithfully to the definition of the term "telephone-billed purchase." In all events, it should craft rules that impose dispute resolution-type mechanisms only on non-telephony products/services billed by a company in an agency capacity, i.e., on behalf of third parties. The Commission should reconsider its proposed compliance obligations and liability standards with respect to billing agents versus the principals in any pay-per-call or telephone-billed purchase transaction, i.e., vendors. However, the Commission should make clear that billing agents are entitled to recover any costs associated with compliance obligations, whether directly or indirectly assumed.

Furthermore, the Commission should leave the specifics of the inter-company commercial relationship to the parties themselves to work through. It should reconsider its "access to information" requirements, modifying them to permit the Commission access only to that information that is salient to the vendor/service bureau/billing entity relationship. The Commission should not have a rule that could be read to allow it to secure "customer-type" information in the absence of lawful process.

In recognition of sound statutory construction principles, the absence of any evidence of abuse, and the dynamics of the "tariffed" regulatory environment, the Commission should not add the word "tariffed" to proposed rule 308.2. Finally, the Commission should make clear the distinction between "taking a charge off a bill" through a credit-type mechanism and an action of "forgiveness." Billing entities might engage in either type - or both - behaviors. So long as they make clear to individuals which activity is being undertaken, both should be permitted.


Kathryn Marie Krause

Enclosure (diskette)


1. As requested, U S WEST provides six copies of our written Comments, along with a diskette containing its response (sans attachment) in electronic form.

2. See reference to the current rule as the "900 Number Rule," Notice of Proposed Rulemaking, 63 Fed. Reg. 58524, Section A, 2, dated Oct. 30, 1998 ("NPRM").

3. Id. at 58526.

4. Section 701(b)(1) of the Telecommunications Act of 1996 ("1996 Act") granted the Commission certain authority to extend the definition of "pay-per-call services" "to other similar services providing audio information or audio entertainment" if the Commission "determine[d] that such services are susceptible to the unfair and deceptive practices" currently prohibited by the pay-per-call rules.

5. See NPRM at 58530 (where the Commission discusses the definition of the term "billing entity," noting that "where multiple entities (including LECs, vendors, service bureaus, and third-party debt collectors) are involved in collecting a charge for a telephone-billed purchase, each of those entities will be considered a billing entity and therefore must afford a consumer his or her dispute resolution rights under the Rule."

6. 15 U.S.C. § 5724(1).

7. NPRM at 58541.

8. 8 Id.

9. FCC and Industry Announce Best Practices Guidelines to Protect Consumers from Cramming, FCC Press Release, rel. July 22, 1998. And see In the Matter of Truth-in Billing and Billing Format, Notice of Proposed Rulemaking, 13 FCC Rcd. 18176, 18180 ¶ 9 and n.24 (1998).

10. These services are expressly excluded from the statutory and rule definitions of "telephone-billed purchase." See 15 U.S.C. § 5724(1) and 16 C.F.R. § 308.7.

11. As the Federal Communications Commission ("FCC") has noted, all enhanced services are information services but not all information services are enhanced services. In the Matter of Implementation of the Non-Accounting Safeguards of Sections 271 and 272 of the Communications Act of 1934, as amended, First Report and Order and Further Notice of Proposed Rulemaking, 11 FCC Rcd. 21905, 21956 ¶ 103 (1996).

12. Compare for example, NPRM at 58528 ("the proposed Rule provides dispute resolution protections for all transactions that result in non-toll charges on a subscriber's phone bill, even if the charges for such purchases did not result from a telephone call and were not based on [Automatic Number Identification] ANI capture"); 58549 at n.256 states: "For example, if a LEC were to issue a secure PIN to subscribers, the LEC could require subscribers to use this PIN when ordering enhanced services."

13. Compare NPRM at 58531 where it references "club memberships, voice mail, Internet access, personal 800 numbers, and pagers" as "enhanced services." This is not totally accurate as club memberships would probably be deemed non-telecommunications services but not enhanced and the provision of personal 800 numbers might well be an interexchange carrier service. And see id. at 58541 ("Consumers can purchase voice mail, Internet access, telephone equipment, roadside assistance club memberships, and other goods and services and have the charges billed to their telephone bill."; "unauthorized charges . . . are often purportedly for club memberships, or subscriptions for psychic, personal, travel, or 900-number services. In other instances, the charges involve services such as personal 800 numbers, voice mail, paging, and calling cards."). Similar to the above observation, paging services are generally considered to be telecommunications services and carrier access to and billings associated with calling cards are often tariffed.

14. In the NPRM there is language suggesting the Commission does not mean to extend its jurisdictional authority over carrier billings directly to their customers for non-telecommunications services (such as voice mail, Internet access, customer premises equipment ("CPE")), types of billing which have been occurring for over a decade with no federal regulatory interference. NPRM at 58527, Section B, 1 ("More recently, there has been a sharp rise in the development of a market for non-audiotext telephone-billed purchases that are in many cases not directly related to telecommunications services or sold by common carriers [emphasis added]. For example, consumers can now purchase voice mail, Internet access . . . and a host of other services from vendors who charge the consumer's telephone bill, often based solely on Automatic Number Identification (ANI)" and id. at 58549 (noting that "basic telecommunications services are most often purchased from an entity with whom the consumer has a pre-existing and voluntary relationship").

Additionally, the observation in the NPRM that "[a]t the time the original Rule was promulgated, 900-number services were the primary, if not the only, familiar example of telephone-billed purchases" (id. at 58541, emphasis added; see similar remarks at 58527 and 58531) is clearly not accurate with respect to carriers' billings to their own customers. While it is correct to say that carrier's billing statements did not - in 1992 - generally contain billings for these services for third parties, by that time carriers were routinely billing customers for their own enhanced services (such as voice mail, fax store and forward) and CPE offerings.

15. Compare id. at 58541-42 (noting that Congress was seeking the establishment of a "comparable" billing environment under the TDDRA protections), at 58551 ("TDDRA requires that the Commission impose requirements that are substantially similar to the requirements imposed under TILA [Truth In Lending Act] and FCBA [Fair Credit Billing Act] with respect to the resolution of credit disputes.") (footnote citations omitted). Generally, credit card companies are not service suppliers (except with respect to annual fees, interest and late payment charges). The primary function of the card is to allow third parties to secure billing arrangements for their products and services. Thus, the "dispute resolution" function of credit card billing is directed toward third-party provision of services.

16. Id. at 58525 the Commission notes that the provisions of Section 701(b) of the 1996 Act amended the definition of the term "pay-per-call services" and granted the Commission the power "to extend the definition of the term . . . to include certain audiotext services that may use a dialing prefix other than 900 and services for which there is a charge that is greater than, or in addition to, the charge for transmission of the call." (footnote citations omitted). And see id. at 58527 (noting that Section 701(b) extended the "definition of 'pay-per-call services' to cover similar audio information and entertainment services that are susceptible to the unfair or deceptive acts or practices prohibited by the 900-Number Rule."; emphasis added). Furthermore, the Congressional authorization to prohibit "'alternative billing or other procedures' which are unfair or deceptive or undermine the rights provided to consumers" generally refer to those rights created under Title II, the pay-per-call provisions. See id. 58526, 58525. And id. at n.40. See also id. at 58546-47 (discussing the insertion of a new rule 308.12 that would prohibit audiotext vendors from providing services pursuant to the exclusions outlined in the statute and rule because such would erode consumer confidence and would be inherently deceptive).

While Title III of the TDDRA does indicate a Congressional intent that the Commission have "flexibility in prescribing regulations that are 'necessary or appropriate' to implement the provisions" of that Title (id. at 58542), there is no evidence that a carrier's billing to its own customers is currently done in an unfair or deceptive manner or "evades" generally acceptable commercial dispute resolution practices or "undermines" the interests of consumers. Id.

17. Id. at 58526-27 (with specific reference to the "legitimate pay-per-call industry").

18. See, e.g., id. at 58530, Item 2, Subpart A, Section 308.2(1) where the NPRM narrative notes that the definition of the term "billing entity" "is critical to the dispute resolution process . . . of the proposed Rule because all persons and entities that fall within the meaning of the term . . . will be required to comply with the steps set forth in that section."

19. Id. at 58549 (footnote citations omitted).

20. Id. at 58554-55.

21. In proposed rule section 308.17, the Commission proposes a "knew or should have known" standard. Id. at 58564. However, the practical implementation of the rule would render a billing entity liable beyond the terms of the liability standard since a complaint by a single customer might be deemed sufficient to put the billing entity on notice of some rule violation.

22. Id. at 58549.

23. See Proposed Rule § 308.12 (NPRM at 58564).

24. NPRM at 58554, n.286.

25. There might be some confusion, even among carriers, about the necessity for an annual notice. The FCC had originally required that carriers provide information to customers about their TDDRA 900 service/billing rights pursuant to 47 C.F.R. § 64.1509. Similar information was also required to be provided to customers with each billing statement where pay-per-call services were included in the bill. See 47 C.F.R. § 64.1510. In 1995, the FCC determined that the annual notification requirement contained in Section 64.1509 could be met by a publication in a telephone directory, distributed annually, rather than through a mailed document. See Letter to Mr. Bruce Liles, BellSouth Telecommunications, Inc. et al., from John B. Muleta, Chief, Enforcement Division, Common Carrier Bureau, dated Aug. 29, 1995, rel. Sep. 8, 1995, DA 95-1883 (in support of this position was the fact that similar information was provided on a "transactional basis" in monthly bills when individuals accessed such services). Apparently, at that point, some carriers ceased providing annual notifications through the mail. U S WEST did not.

U S WEST continued to provide an annual notification which included the information identified as necessary in the FTC's rule 308.7(n). This information is materially different in many respects from that information required to be provided by the FCC. In its Report and Order in In the Matter of Policies and Rules Implementing the Telephone Disclosure and Dispute Resolution Act, 8 FCC Rcd. 6885 (1993) ("1993 Order"), the FCC considered what elements or items of information should be included on a customer's bill from its perspective. Based on filed comments, it added some additional information over and above that originally proposed in its rulemaking notice. However, at paragraph 73 of the 1993 Order, the FCC declined to "mandat[e] any billing disclosures related to dispute resolution." Thus, the monthly billing statements currently produced by U S WEST contain the monthly information required by FCC Rule 64.1510 but not necessarily the type of information proposed to be incorporated by the NPRM.

26. The FTC might misapprehend the nature of the current disclosures contained on/in the bill. Compare NPRM at 58556 (claiming that certain disclosures already "appear on each billing statement that contains a charge for a call to a pay-per-call service" and that since "these disclosures appear on telephone bills already generated by the local telephone companies, and because the carriers are already subject to nearly identical requirements pursuant to the FCC's rules, . . . the burden to comply would be minimal." (emphasis added)). As discussed above in note 25, the disclosures the FTC is proposing be included in monthly bills are substantially different from those currently required by the FCC under 47 C.F.R. § 64.1510(2).

27. This figure would be greater to the extent U S WEST's billing system was required to be selective with respect to those individuals who received the dispute resolution content, i.e., only those with certain qualifying "telephone-billed purchases."

28. For example, even if there were a common vendor of 900 and other types of telephone-billed purchases (such as voice mail or Internet access), the two services are billed on a separate portion of the bill. A notice with respect to both types of calls would probably run each billing section into two pages, costing Big Joe a lot of money. Since the Commission references that notices may be put on the back of the bill (see Proposed Rule 308.20(m)(2)(i) (NPRM at 58566)), U S WEST assumes a single notice would be sufficient.

29. NPRM at 58527, Section B., 1.

30. Id. at 58553.

31. Id.

32. Id. at 58536.

33. 47 U.S.C. § 228(i)(2).

34. NPRM at 58536.

35. See Proposed Rule and discussion at 58550.

36. Id. at 58550.

37. Proposed Rule 308.2(n) (NPRM at 58560).

38. Compare NPRM at 58551-52 ("If a billing entity receiving the billing error notice decides to respond to that notice by forgiving the disputed charge, it has no further obligation to conduct a reasonable investigation.").