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Press Release July 11, 2000 |
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But rule would add to confusion by hiding fees and
surcharges
AUSTIN, TX -- At its meeting on Wednesday, the Public Utility
Commission will vote on adoption of a long-awaited rule aimed at
making telephone bills more understandable for Texas consumers. But
the problem is the proposed rule would do just the opposite,
Consumers Union said today.
"After months of meetings and written comments, PUC staff has
proposed a rule which we believe falls short of the goal of making
phone bills more understandable," said Janee Briesemeister, senior
policy analyst with CU's Southwest Regional Office. "Contrary to its
stated goal, the rule would raise confusion and reduce consumers'
ability to verify charges by allowing companies to hide the amount of
fees and surcharges on phone bills."
Briesemeister said the proposal would also widen the "digital
divide" between consumer have and have-nots by, in essence, allowing
companies to offer local phone service only to those who have access
to the Internet.
Under the rule, telephone companies would be required to show on
each bill the total price charged for basic local phone service,
including all fees and surcharges (such as 911 fees, universal
service fund, subscriber line charge). These fees and surcharges
would then be itemized, either as detail under the total or on a
separate part of the bill, identified through a legible footnote or
asterisk. However, the company could decide for itself whether or
not to itemize the amount of the charge for each fee or surcharge.
"This obviously defeats the purpose of providing clearer consumer
disclosure," Briesemeister said. "It doesn't make sense for
companies to be required to provide their customers with a list of
fees and surcharges, but not state those charges in dollars and
cents."
Consumers Union is urging the PUC to amend the proposed rule by
requiring companies to show - in dollars and cents -- each and every
fee and surcharge placed on their phone bill. Nationally, fees and
surcharges have resulted in billions of dollars of increases to the
bottom line of local phone bills during the last four years.
Several fees and surcharges are calculated based on a percentage of
the total phone bill.
"How can the consumer verify the charge is correct, if the company
is not required to show the amount of the charge?" said
Briesemeister. "This leaves open the possibility of a company
charging more than the government-approved amount, and giving the
customer little ability to verify the amount."
The proposal also gives companies discretion on how to categorize
some types of charges, such as the charge for the Texas Universal
Service Fund, and non-recurring charges (such as installation).
Consumers Union believes a lack of standardization will create more
confusion over phone bills, not less.
In addition, the proposal before the Commission permits new
competitors, but not incumbents, to provide service conditioned on
Internet or e-mail billing. In other words, that company's phone
service would not be available to any consumer who did not have
access to the Internet in order to pay the monthly bill.
"A policy such as Internet-only billing serves to widen the
digital divide," Briesemeister said. "Internet billing should be an
option that a consumer can accept or reject in favor of receiving a
bill through the mail. By allowing companies to provide service only
to those consumers who can accept Internet billing, the rule cuts off
a competitive option from many consumers, primarily those living in
rural areas and lower income households, who do not have access to
the Internet."
Consumers Union, publisher of Consumer Reports, is an independent, nonprofit testing and information organization serving only the consumer. We are a comprehensive source of unbiased advice about products and services, personal finance, health nutrition, and other consumer concerns. Since 1936, our mission has been to test products, inform the public, and protect consumers.
