TELETRUTH NEWS ALERT ---February 2nd, 2005

Bruce Kushnick, Chairman, [email protected]
Tom Allibone, Director of Audits,
[email protected]

Phone: 1-800-FYI-AUDITS

To Read the Complaint and Other Materials

To See: Bell Skunkworks 101

Teletruth Files Request for a Congressional Investigation of the Control of the FCC Consumer Advisory Committee by Telecommunications Business Interests.

With Powell's Departure, Time to FIX the FCC to Protect the Public Interest.

New York ---Can you understand the charges and taxes on your phone bill? Of course not. Why hasn’t the FCC moved to fix this nationwide problem?

Teletruth, an independent, national customer alliance today requested an investigation of how phone company interests, and not consumers, are in control of the FCC's Consumer Advisory Committee (CAC).

In 2003, Teletruth was appointed to be on the FCC Consumer Advisory Committee. Teletruth was honored to serve. Our specialty and expertise is the auditing and correcting of mistakes on residential and small business phone bills, as well as covering other areas of the phone and broadband industries for the public interest.

However, it has become clear over the course of two-years of events that this Committee is the epitome of "regulatory capture" — the telecommunications industry has been able to unduly influence events on this Committee and at the Commission, and has harmed the public interest.

"We found that the problem with phone bills is that the regulatory system has fallen to the depths of no longer serving the public’s needs," states Tom Allibone, Director of Audits for Teletruth and former FCC Consumer Advisory member. "The phone companies never would back any investigation of their own products. And their opinions, not the consumers, were the final determination in examining phone bills. There is no truth-in-billing today."

Make Up of the Committee —Phone Companies and their Associations’ Lawyers.

The lofty goal of the FCC Consumer Advisory Committee is to: "…make recommendations to the FCC regarding consumer issues within the jurisdiction of the Commission and to facilitate the participation of consumers.... in proceedings before the Commission."

This FCC Consumer Advisory Committee now has almost as many industry lawyers defending their clients, than actual consumer advocates, or, dare I say, any consumers. For example, what are the lawyers for these companies and associations doing on a Consumer Advisory Committee? — AT&T, BellSouth, Cingular, Verizon, MCI, Cellular Telecommunications and Internet Association, National Association of Broadcasters, Telecommunications Industry Association, and the National Cable Telecommunications Association. Many of the consumer issues are directly related to industry’s own business actions. See the full member list.

A recent Washington Post (12/8/04) column remarked: "You'd think when Chairman Michael Powell had a chance to appoint a Consumer Advisory Committee to act as something as a counterweight to industry lobbying, he wouldn't have handed more than a third of the 35 seats over to representatives from the likes of AT&T, BellSouth, the National Association of Broadcasters and the National Cable & Telecommunications Association.".

To make matters worse, there are also members on the Committee, such as Alliance for Public Technology, (APT) who are essentially funded by the Bell phone companies to look like they represent consumer interests, but are more focused to help the companies’ agenda. APT’s sponsors are BellSouth, SBC, SBC California (Pac Bell), and Verizon. (This represents virtually all of the former Bells — 8 different merged firms, from Ameritech, Southwestern Bell, Pac Bell and SNET to Bell Atlantic, NYNEX and GTE.)

This group and others are directly tied to Issue Dynamics, the major architect of the Bell companies' political skunk works, designed to create the illusion of 'grass roots', but are instead 'astro-turf' groups, directly supporting the phone companies' policies.

The Harm to All "Truth-in-Billing"

Can you find the five mistakes on this SBC California phone bill?

Can you find the mistake on this Verizon New Jersey bill?

In a deregulated marketplace, the phone bill has become a joke on the customer. Everyone reading this document knows that phone bills are still unreadable. (There is plenty of data to support this claim.) And unfortunately, the miscalculations of taxes, missing small business discounts, and overcharging on services that were never ordered are also common, hidden by unreadable bills, and thus "truth-in-billing" violations.

Teletruth had completed numerous surveys of wireline and wireless phone bills in New York, New Jersey, California and Pennsylvania, over 1000 phone bills. In 2004, the data from the Teletruth survey helped to document that 50,000 customers were missing their small business discounts in New Jersey, leading directly to hefty refunds. And yet, this information and other important data was not aired and vetted by the CAC.

Working Groups Are Deadlocked Over Consumer Protection Issues

After two years, the final output of the Committee was deadlocked. Because of the industry players within this group, the current report pertaining to Truth-in-Billing concludes:

"The Working Group worked tirelessly to develop joint recommendations that would address both industry and consumer agencies' perspective on truth-in-billing issues. Although healthy debates took place, the Working Group could not reach a consensus".

After two years, the committee’s emphasis has been to say: "Let customers beware. Phone bills are OK and we don’t have to do anything about it."

This wasn’t the only working group that was unable to come to a consensus. The "Competition Working Group" who’s mandate is to "…consider recommendations to the FCC regarding policies that would best continue the opportunities for consumers to benefit from competition in telecommunications", also couldn’t reach a consensus.

Instead, this competition group "…was unable to come to agreement on both the introductory statement and the list of general principles." As the Washington Post put it: "…the working group on competition threw in the towel completely after failing to come up with definition for ‘competitive market.’."

Congress Should Investigate a Consumer Committee without Consumers.

We need to also note that this problem of proper public interest representation runs through all of the other FCC Committees, and it is not simply the Consumer Committee, and Teletruth is not alone in our grievance about how the FCC committees select members. Last month, December, 2004, the GAO released a report, GAO-05-36, titled "Federal Advisory Committees Follow Requirements, but FCC Should Improve Its Process for Appointing Committee Members."

"We would also like to make something clear — We are proud to be appointed to this Committee and we have a great deal of respect for most of the members, who are hard working people, donating their time to make consumer issues a priority at the FCC," states Bruce Kushnick, chairman of Teletruth and former Alternate on the Consumer Advisory Committee. "However, this process has been a serious disappointment to us. More to the point, this process is a slap in the face of the public's interest to have their voices heard at the FCC. Therefore, we are asking that situation be investigated by Congress to see what changes need to be made, not only in the boards’ composition, but the protection of customers from bad practices of the telecommunications industry," adds Kushnick.

"With the departure of Michael Powell, it is time to reevaluate the FCC's Public Interest requirements and make amends for the disenfranchised and disconnected — all telephone and broadband customers," states Allibone. "The FCC has requested new people apply for this Committee. The FCC should fix the membership process before it starts filing up any posts."

To read our grievance, learn more about phone bill problems and other materials see:

To see our new collection of materials "Bell Skunkworks 101", and how the phone companies use astro-turf groups, see: