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WASHINGTON, March 1, 2000 --
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.
"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.
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.
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.
The guidelines have not been formally issued as rules. Spokesmen
for both agencies said they hoped it would not be necessary,
since the long-distance industry has indicated a willingness
to modify its practices.
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