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 ƒ   ! ÝÝ    ÝÒ    p° ÒÑ    ,° ÑÑ   ð ° ÑÖ  €       ÿÿ ÖÖ €       ÿÿ ÖÓ          ÓÒ   t° Ò€€€€€€€€€€€€€€€€€€FEDERAL€TRADE€COMMISSIONÌ€€€€€€€€€€€€€€€€€€€€€€€€€òòI€N€D€E€XÐ   	 l   Ðóó€Ð   	 ü    ÐòòAGENDA€ITEMóó:€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€òòPAGEóó:Ð   	 Œ
°   Ð€ÌBart€Gordon€Remarks€€€€€€€€€€€€€€€€€€€€€€€€€€4ÌWelcome--€Ms.€Harrington€€€€€€€€€€€€€€€€€€€€€9ÌChargebacks€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€41ÌChargebacks€for€International€Audiotext€€€€104ÌImpact€of€Changes€on€Chargebacks€€€€€€€€€€€125ÌBilling€&€Collecting€Issues€€€€€€€€€€€€€€€€148ÌBilling€Entities€€€€€€€€€€€€€€€€€€€€€€€€€€€198ÌSolutions€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€244ÌÐ	   	 ,P   Ð€€€€€€€€€€€€€€€€€€€FEDERAL€TRADE€COMMISSIONÌ€ÌIn€the€Matter€of:€€€€€€€€€€€€€)ÌWorkshop€on€Pay-Per-Call€€€€€€)ÌRulemaking.€€€€€€€€€€€€€€€€€€€)Ì------------------------------)Ì€€€€€€€€€€€€€€€€€€€€€€€€€Thursday,€June€19,€1997Ì€Ì€€€€€€€€€€€€€€€€€€€€€€€€€Room€432Ì€€€€€€€€€€€€€€€€€€€€€€€€€Âé¶¹´«Ã½€Trade€CommissionÌ€€€€€€€€€€€€€€€€€€€€€€€€€6th€Street€and€PennsylvaniaÌAve.,€NWÌ€€€€€€€€€€€€€€€€€€€€€€€€€Washington,€D.C.€20580Ì€Ì€€€€€€€€€€The€above-entitled€matter€came€on€forÌconference,€pursuant€to€notice,€at€9:00€a.m.Ì€ÌAPPEARANCES:Ì€ÌòòFROM€THE€FEDERAL€TRADE€COMMISSIONóó:Ð   	 Œ#°&   Ðòò€€€€€€€€EILEEN€HARRINGTONÐ   	 %@(   Ð€€€€€€€€ALLEN€HILEÌ€€€€€€€€MARIANNE€SCHWANKEÌ€€€€€€€€MARK€HERTZENDORFÌ€€€€€€€€ADAM€COHNÌÐ	   	 ì,'2   Ðóó€Ð   	 Ü      ÐòòFROM€THE€INDUSTRYóó:Ð   	 l   Ð€Ìòò€€€€€€€€PETER€J.€BRENNAN,€TPIÐ   	 Œ
°   Ð€€€€€€€€R.€J.€GORDON,€R.€J.€Gordon€&€Co.Ì€€€€€€€€LINDA€A.€GOLDSTEIN,€Hall€DicklerÌ€€€€€€€€J.€ALAN€TAYLOR,€Florida€PSCÌ€€€€€€€€BARBARA€MAJESKI,€SNETÌ€€€€€€€€ALBERT€J.€ANGEL,€ICN€LimitedÌ€€€€€€€€JON€W.€SHAUB,€AT&TÌ€€€€€€€€JAMES€H.€BOLIN,€JR.,€AT&TÌ€€€€€€€€DAVE€GILLIS,€NAAGÌ€€€€€€€€JILL€SANDFORD,€NAAGÌ€€€€€€€€REBECCA€G.€BOWMAN,€NAAGÌ€€€€€€€€SUSAN€GRANT,€National€Consumers€LeagueÌ€€€€€€€€KIM€WILLIAMS,€Southwestern€BellÌ€€€€€€€€WALT€STEIMEL,€JR.,€PilgrimÌ€€€€€€€€JOEL€R.€DICHTER,€Klein€ZelmanÌ€€€€€€€€DON€KLUG,€MCIÌ€€€€€€€€RONALD€S.€GOLDBRENNER,€PMAAÌ€€€€€€€€TODD€LESSER,€JARTEL,€Inc.Ì€€€€€€€€GARRETT€L.€PASSON,€NTS,€Inc.Ì€€€€€€€€PHILLIP€MELLO,€Telecompute€Corp.Ì€€€€€€€€IAN€K.€EISENBERGÌóó€Ð   	 \+€%0   ÐÐ	   	 ì,'2   Ðòò€€€€€€€€€€€€€€€€€€€€P€R€O€C€E€E€D€I€N€G€SÐ   	 Ü      Ð€€€€€€€€€€€€€€€€€€€€-€€€€-€€€€-€€€€-€€€€-Ìóó€€€€€€€€MS.€HARRINGTON:€€Good€morning,€everyone,€andÐ   	 ü    Ðhere€we€are€again.€€I€am€Eileen€Harrington€with€theÌÂé¶¹´«Ã½€Trade€Commission's€Bureau€of€Consumer€ProtectionÌstaff.€€I€am€going€to€be€moderating€these€sessions,€andÌas€General€Haig€said,€don't€worry,€I€am€in€completeÌcontrol€here,€and€I€am€going€to€demonstrate€that€byÌmaking€a€switch€on€the€agenda€right€off€the€bat.Ì€€€€€€€€Before€we€do€welcome€announcements€and€coverÌprocess€and€ground€rules€for€the€next€two€days,€we€areÌvery€honored€to€have€with€us€this€morning€CongressmanÌBart€Gordon€of€Tennessee€who€long€has€had€a€veryÌthoughtful€interest€in€issues€concerning€audiotextÌservices,€telecommunications€and€consumer€protection,Ìamong€others.Ì€€€€€€€€Congressman€Gordon€is€on€a€very€tight€scheduleÌthis€morning,€and€we€are€going€to€turn€to€him€for€hisÌremarks.€€He€has€filed€a€comment€and€otherwise€played€byÌall€of€the€rules€that€all€of€the€rest€of€you€have.€€WeÌare€delighted€to€have€his€input€in€this€rulemaking,€andÌI€now€turn€to€the€Honorable€Bart€Gordon€from€the€stateÌof€Tennessee€for€his€comments,€and€then€my€understandingÌis€that€the€Congressman€has€a€hearing€and€will€beÌleaving€right€away.ÌÐ	   	 ì,'2   Ð€€€€€€€€REPRESENTATIVE€GORDON:€€I€have€a€hearing€onÌelectronic€or€Internet€privacy,€which€we€were€justÌtalking€about,€so€I€will€have€to€go€back€to€the€rankingÌmember€on€that€committee,€but€first€let€me€just€--€IÌwant€to€thank€you,€Eileen,€for€the€good€job€you've€doneÌand€the€FTC€in€both€implementing€TDDRA€as€well€as€takingÌthis€next€step€to€try€and€finetune€it€and€for€all€of€theÌfolks€here€at€the€table,€many€of€you€I€have€been€workingÌwith€over€the€years.Ì€€€€€€€€This€is€a€very€complicated€issue€in€a€lot€ofÌways.€€It€reminds€me€what€a€former€math€teacher€of€mineÌtold€me€that€there€were€three€kinds€of€people€when€itÌcomes€to€arithmetic,€those€that€understand€it€and€thoseÌthat€don't,€and€so€I€hope€that€you're€ones€thatÌunderstand€this,€because€I€know€it's€very€complicated,Ìand€I'm€glad€to€join€you.Ì€€€€€€€€I€have€included€some€formal€remarks€that€go€intoÌspecifics€on€some€of€the€questions€that€you€asked,€soÌI'm€not€going€to€spend€a€lot€of€time€on€that,€but€toÌgive€you€a€little€background€on€how€I€became€interestedÌand€how€really€TDDRA€got€developed,€as€a€member€ofÌCongress,€I€have€a€lot€of€open€meetings,€and€I€wentÌthrough€a€period€of€time€where€I€continued€to€hearÌpeople€complain€about€scams€from€900€numbers,€parentsÌwho€would€find€that€a€slumber€party€would€result€in€aÌÐ	   	 ì,'2   Ðlot€of€unknown€bills€being€run€up€on€their€charges,Ìbusiness€individuals€that€would€find€that€maybe€aÌdelivery€boy€would€come€by€and€make€a€variety€of€callsÌor€a€motel€operator€would€find€that€a€lot€ofÌunauthorized€calls€were€made€and€bills€--€were€coming€inÌto€them€that€they€didn't€know€anything€about,€and€it€wasÌsomething€that€the€more€you€would€ask€about€it,€the€moreÌyou€found€it€was€out€there,€and€so€I€tried€to€find€a€wayÌto€what€I€think€is€restore€the€credibility€of€a€veryÌimportant€commodity,€and€that€is€electronic€commerce€andÌ800€numbers€and€900€numbers.Ì€€€€€€€€In€1992,€when€TDDRA€was€first€passed,€theÌteleservice€business€was€less€than€a€$1€billionÌindustry.€€Now€it's€more€than€a€$6€billion€industry,€andÌI€think€that€if€we€maintain€the€credibility€in€theÌservice,€as€well€as€the€potential€for€the€InternetÌcoming€online,€it€is€just€going€to€explode€with€theÌ0-800€numbers€also€coming€online€soon,€and€it's€veryÌimportant,€and€I€think€this€meeting€is€very€important,Ìthat€we€set€those€ground€rules€so€that€this€industry€canÌcontinue€to€move€forward.Ì€€€€€€€€As€a€result€of€TDDRA€--€and€also,€I€don't€--€IÌwant€to€--€Lisa€Fox€is€here.€€Lisa€worked€with€me,Ìbecause€I€know€--€there€is€Lisa€--€was€working€on€myÌstaff€at€the€time,€and€we€didn't€try€to€dictate€throughÌÐ	   	 ì,'2   Ðthese€rules.€€We€just€--€we€tried€to€bring€people€fromÌall€parts€of€the€industry€and€talk€about€it,€and€LisaÌwas€very€helpful.Ì€€€€€€€€Robin€Mahl€is€--€has€taken€up€the€banner€and€isÌworking€with€my€staff€or€is€my€legislative€directorÌworking€on€this€issue€now,€and€she€will€be€here€today,Ìand€I€want€you€to€know€that€if€there€are€--€whatever€mayÌbe€concerns€about€the€original€intent€of€the€law,€pleaseÌcontact€me,€I'll€come€back,€I'll€call€or€send€whateverÌinformation€that€you€might€need,€and€Robin€will€be€hereÌto€help€on€that.Ì€€€€€€€€But€we€found€a€real€difference€at€home,€theÌcomplaints€have€gone€down.€€I€noticed€in€all€theÌcomments€they€said€the€complaints€have€gone€down.€€InÌTennessee,€over€300,000€people€now€are€using€callÌblocking,€and€I€think€--€I€don't€know€whether€it€wasÌAT&T€said€that€--€no,€I'm€sorry,€another€group€said€thatÌsomething€like€a€third€of€their€customers€--Ì€€€€€€€€MS.€WILLIAMS:€€Southwestern€Bell.Ì€€€€€€€€REPRESENTATIVE€GORDON:€€Yeah,€used€900€blocking,Ìwhich€is€really€amazing€to€me€that€you€can€communicateÌthat€information.€€I'm€someone€who€has€learned€that€youÌhave€to€just€say€it€over€and€over€and€over€to€makeÌpeople€know€something,€and€not€only€do€they€know€it,€butÌthey€act€upon€it,€which€I€think€is€very€good€and€againÌÐ	   	 ì,'2   Ðgives€that€additional€credibility€for€the€--€for€theÌindustry.Ì€€€€€€€€Really€the€telephone€now€is€an€instrument€ofÌelectronic€commerce€like€the€POS,€and€we€are€going€toÌsee€more€and€more€I€think€electronic€commerce,€and€IÌthink€as€this€comes€about,€we€have€got€to€recognize€thatÌit's€sort€of€a€two-edged€sword,€that€the€originalÌpurpose€of€TDDRA€was€to€provide€consumer€protections€toÌgive€the€industry€a€credibility€so€that€it€couldÌcontinue.Ì€€€€€€€€I€think€now€we€have€got€to€be€concerned€thatÌwith€the€protection€the€consumers€have€received,€thatÌthey€also€have€a€responsibility.€€If€they€know€what€theyÌare€getting€into€and€buy€a€service,€then€they€need€toÌpay€for€that€service,€and€that's€something€--€one€of€theÌcharges€of€this€committee€is€to€look€at€the€billing€andÌcollection€procedures.€€Chargebacks€I€think€now€amountÌto€40€or€50€percent€of€the€industry,€and€so€I€hope€thatÌthat€will€be€something€that€will€be€looked€into.€€I€haveÌpresented€some€specific€recommendations.Ì€€€€€€€€And€although€the€Internet€is€something€that€whenÌwe€--€when€we€put€TDDRA€together,€we€thought€that€thatÌwas€something€that€would€come€along,€and€we€gave€you€aÌlittle€hook€there,€and€I€think€that€we€all€recognizeÌthat€probably€the€--€it's€like€a€doctor,€do€no€harm.€€WeÌÐ	   	 ì,'2   Ðdon't€want€to€do€any€more€than€necessary,€but€I€thinkÌthere€is€going€to€be€some€efforts€to€have€some€groundÌrules€in€the€Internet,€and€I€think€what€we€have€learnedÌwith€the€900€industry€can€be€taken€over€there.Ì€€€€€€€€Serving€on€both€the€Commerce€Committee€and€theÌScience€Committee,€we€are€going€to€be€dealing€with€theseÌissues,€and€I€am€also€working€with€Howard€Magaziner.€€SoÌI€would€hope€that€outside€of€the€specificÌrecommendations€that€you€have,€that€as€a€group,€you€willÌfeel€that€you€can€come€to€me€and€to€my€office€withÌrecommendations€that€may€be€outside€this€charge,€ofÌthings€that€you€think€we€need€to€be€looking€at€maybe€inÌa€different€way€and€things€that€we€need€to€be€sure€weÌdon't€meddle€with,€but€please€let€me€have€the€benefit€ofÌall€of€your€expertise€and€thoughts€on€that€end.Ì€€€€€€€€So,€with€that€I'll€get€out€of€your€way€and€letÌyou€get€on€with€your€job.€€And€again,€I€thank€you€forÌthe€good€job€you're€doing€and€look€forward€to€continuingÌto€work€with€you.Ì€€€€€€€€MS.€HARRINGTON:€€Thank€you,€Congressman€Gordon.Ì€€€€€€€€With€that€very€helpful€and€I€think€focusedÌbeginning,€let€me€offer€some€observations€as€we€beginÌfrom€the€staff€of€the€Âé¶¹´«Ã½€Trade€Commission€and€thenÌalso€go€over€with€you€what€the€ground€rules€are€going€toÌbe€for€this€workshop€conference.ÌÐ	   	 ì,'2   Ð€€€€€€€€As€I€look€around€and€say,€well,€here€we€areÌagain,€many€of€you€participated€in€the€originalÌrulemaking€that€interpreted€portions€of€TDDRA.€€I€wasÌthinking€back€on€that€last€night€and€realizing€that€--€IÌguess€that€that€was€four€years€ago€that€we€were€hereÌabout€the€same€time€of€year,€figuring€out€what€theÌground€rules€for€the€industry€ought€to€be€in€regulatoryÌform.Ì€€€€€€€€That€rulemaking€proceeding€was€the€first€timeÌthat€the€Âé¶¹´«Ã½€Trade€Commission€had€used€this€kind€ofÌprocess€in€connection€with€regulatory€work;€that€is,€weÌhad€previously,€as€most€agencies€had,€I€think,€stayedÌtrue€to€the€somewhat€dry€and€rigid€process€of€notice€andÌcomment,€comment,€comment,€comment.€€What€we€found€inÌthe€900€number€rulemaking€where€we€first€used€thisÌprocess€was€that,€first€of€all,€we,€the€staff€people€whoÌare€responsible€for€doing€this€work,€had€much€betterÌinformation€upon€which€to€rely€as€a€result€of€theÌdialogue€that€occurred€at€the€rulemaking€workshop.Ì€€€€€€€€Secondly,€we€were€very€impressed€with€theÌefforts€of€the€participants€in€that€workshop€to€reallyÌlisten€to€one€another€and€to€modify€positions€where€thatÌwas€appropriate.€€And€so€third,€we€found€that€when€weÌactually€promulgated€a€rule,€we€had€a€rule€that€justÌabout€everyone€who€had€an€interest€in€the€issue€wasÌÐ	   	 ì,'2   Ðcomfortable€with.€€It€was€almost€but€not€quite€I€wouldÌsay€a€consensus€rule.€€And€so€that€was,€I€think,€a€veryÌpositive€experience,€and€I€hope€that€the€next€two€daysÌwill€be€equally€helpful€and€positive€for€all€of€us€as€weÌtry€together€to€do€the€right€thing.Ì€€€€€€€€Secondly,€I€was€thinking€about€the€rule€itself,Ìand€along€with€Congressman€Gordon,€who€reports€that€heÌhas€received€hardly€any€complaints€from€his€constituentsÌabout€900€number€scams€since€this€rule€took€effect,€weÌat€the€FTC€have€also€seen€a€huge€drop-off€in€complaintsÌabout€--€about€scams€that€are€associated€with€the€900Ìnumber€dialing.Ì€€€€€€€€Unfortunately,€we€have€seen€a€huge€increase€inÌpay-per-call€and€complaints€about€pay-per-call€servicesÌthat€are€delivered€outside€of€the€900€number€dialingÌpattern.€€And€one€of€the€hard€issues€that€we€have€toÌdeal€with€is€whether€and€how€there€might€be€a€way€toÌextent€TDDRA-type€protections€to€consumers€who€availÌthemselves€of€those€services€that€don't€use€the€900Ìnumber€dialing€pattern.€€But€in€terms€of€a€rule€that€hasÌhad€some€positive€effect€in€laying€ground€rules€thatÌlegitimate€players€have€followed€to€the€benefit€of€anÌindustry€and€consumers,€we€I€think€have€been€generallyÌpleased€with€the€results€of€our€rulemaking€work€lastÌtime€around.ÌÐ	   	 ì,'2   Ð€€€€€€€€The€other€thing€that€occurred€to€me€as€I€wasÌthinking€about€this€work€is€that€the€TDDRA€legislationÌand€the€rule€that€followed€were€the€first€efforts€toÌprovide€the€state€attorneys€general,€who€are€our€mostÌimportant€partners€in€the€law€enforcement€field,€withÌaccess€to€the€federal€courts€for€enforcement€proceedingsÌand€to€obtain€relief€for€their€citizens,€and€thatÌlegislative€and€regulatory€model€has€now€been€followedÌin€several€other€important€consumer€protection€areas,Ìtelemarketing€sales,€fair€credit€reporting€and€homeÌequity€protection.Ì€€€€€€€€And€so€really€this€regulatory€effort€that€beganÌwith€the€enactment€of€TDDRA€from€our€perspective€broughtÌabout€a€number€of€firsts.€€First€in€opening€up€theÌprocess€to€one€that€involves€more€dialogue;€first€inÌproviding€shared€legal€authority€to€the€states€to€makeÌaccess€--€to€have€access€to€the€federal€courts;€andÌreally,€I€think,€a€first€in€--€in€my€anecdotalÌrecollection€of€rulemaking€at€the€FTC,€we€weren't€suedÌover€this€rule,€and€we€expect€that€we€won't€be€overÌwhatever€modifications€we€make€either.Ì€€€€€€€€So,€with€those€comments€and€observations,€let€meÌtell€you€a€little€bit€about€how€we€are€going€toÌoperate.€€First€of€all,€I'll€be€sharing€the€moderatingÌduties€with€my€colleague,€Allen€Hile,€who's€an€assistantÌÐ	   	 ì,'2   Ðdirector€in€our€division.€€So,€either€Allen€or€I€will€beÌfacilitating€and€moderating€throughout.Ì€€€€€€€€We€are€joined€by€the€excellent€staff€that€willÌbe€doing€the€actual€work€here,€Carol€Danielson,€AdamÌCohn,€Marianne€Schwanke,€Mark€Hertzendorf.€€ThroughoutÌthe€session,€they€will€be€asking€questions€of€you€andÌtrying€to€get€you€to€talk€to€each€other€and€respond€toÌeach€other.Ì€€€€€€€€As€is€always€the€case€in€these€session,€a€veryÌhigh€premium€will€be€placed€on€participation€that€isÌresponsive€and€a€very€low€value€will€be€placed€onÌparticipation€that's€simply€restates,€positions€taken€inÌwritten€comments€or€otherwise€is€not€really€responsiveÌto€what€is€being€discussed€at€the€table.Ì€€€€€€€€The€process€for€being€recognized€is€simply€justÌput€your€name€tent€up,€and€I€will€be€calling€on€peopleÌin€some€order€but€will€be€somewhat€arbitrary€aboutÌthat.€€I'll€be€keeping€track€of€who€wants€to€participateÌbut€also€recognizing€people€sometimes€out€of€turn€if€theÌinterest€that€they€represent€seems€particularly€wellÌsuited€to€respond€to€something€that€has€just€been€said.ÌHopefully€everyone€will€feel€that€they€have€had€an€ampleÌopportunity€to€participate€in€the€discussion.Ì€€€€€€€€I€will€also€be€recognizing€staff€people€fromÌthe€Commission€so€that€they€can€follow€up€with€questionsÌÐ	   	 ì,'2   Ðin€close€proximity€to€the€comments€that€have€been€madeÌby€the€person€to€whom€they€wish€to€address€theÌquestions.€€So,€please€be€patient.€€We€will€get€to€you,Ìbut€we€will€also€be€trying€to€facilitate€dialogue€hereÌrather€than€just€a€series€of€monologue€presentations.Ì€€€€€€€€We€will€stay€on€schedule€strictly.€€We€need€youÌto€do€something€for€us€right€off€the€bat€here,€and€thatÌis€to€identify€yourself€by€name€and€affiliation.€€WeÌhave€a€stenographer€who€is€a€making€record€of€this.ÌThis€is€part€of€a€rulemaking€proceeding,€so€we€areÌmaking€a€record,€and€it's€very€important€that€we€knowÌwho€you€are€and€who€you€represent€when€you€speak,€and€soÌwe€would€like€you,€please,€to€do€this€once€at€theÌbeginning,€and€then€I€will€try€to€call€on€you€by€name,Ìbut€if€I€don't,€please€state€your€name€every€time€youÌspeak€so€that€our€reporter€can€keep€a€record€of€who€isÌsaying€what,€and€we€may€interrupt€you€if€the€reporter€isÌhaving€difficulty€identifying€you.Ì€€€€€€€€The€other€sort€of€housekeeping€point€is€that€weÌknow€that€some€of€you€represent€organizations€that€haveÌmore€than€one€representative€here€and€that€you€will€beÌswitching€off.€€We€need€you,€before€you€switch€off€atÌthe€break€--€I'm€assuming€that€you€are€going€to€beÌswitching€at€break€times,€and€so€at€the€break,€pleaseÌsee€our€reporter€and€tell€her€that€you€will€be€replacingÌÐ	   	 ì,'2   Ðso€and€so€on€behalf€of€such€and€such€group€at€the€tableÌfor€the€next€session.Ì€€€€€€€€Is€that€all€agreeable€to€everyone?Ì€€€€€€€€All€right€--€oh,€and€please€wear€your€name€tagsÌall€the€time,€all€the€time.€€Thank€you.Ì€€€€€€€€There€are€rest€rooms€on€this€floor€almostÌdirectly€outside€of€the€room.€€There€is€a€telephone€inÌthe€anteroom€area,€although€I€would€remind€you€that€theÌdoors€are€open€into€that€area.€€So,€if€you€need€to€useÌthe€telephone,€if€you€could€speak€softly,€that€would€beÌhelpful.Ì€€€€€€€€Does€anyone€have€any€questions€before€we€begin?ÌAny€questions€about€the€process?Ì€€€€€€€€Okay,€I€would€like€first€of€all€for€theÌreporter's€benefit€to€ask€each€person€to€just€say€yourÌname€and€say€what€organization€you're€representing€andÌdo€it€slowly.€€So,€I'm€going€to€begin.Ì€€€€€€€€I€am€Eileen€Harrington€from€the€Bureau€ofÌConsumer€Protection€of€the€Âé¶¹´«Ã½€Trade€Commission.Ì€€€€€€€€MR.€HILE:€€Allen€Hile€from€the€Bureau€ofÌConsumer€Protection€with€the€Âé¶¹´«Ã½€Trade€Commission.Ì€€€€€€€€MR.€COHN:€€Adam€Cohn€of€the€Bureau€of€ConsumerÌProtection€of€the€Âé¶¹´«Ã½€Trade€Commission.Ì€€€€€€€€MS.€DANIELSON:€€Carol€Danielson,€Bureau€ofÌConsumer€Protection,€Âé¶¹´«Ã½€Trade€Commission.ÌÐ	   	 ì,'2   Ð€€€€€€€€MR.€BRENNAN:€€Peter€Brennan,€Tele-PublishingÌIncorporated.Ì€€€€€€€€MR.€R.€GORDON:€€Richard€Gordon,€chairman€of€theÌTeleservices€Industry€Association.Ì€€€€€€€€MS.€GOLDSTEIN:€€Linda€Goldstein,€PromotionalÌMarketing€Association€of€America.Ì€€€€€€€€MR.€TAYLOR:€€Alan€Taylor€with€the€Florida€publicÌservice€commission.Ì€€€€€€€€MR.€ANGEL:€€Albert€Angel,€ICN€Limited€on€behalfÌof€ISA,€Interactive€Services€Association.Ì€€€€€€€€MR.€SHAUB:€€Jon€Shaub,€AT&T,€Multiquest€900ÌServices.Ì€€€€€€€€MR.€GILLIS:€€Dave€Gillis,€I'm€with€the€WisconsinÌattorney€general's€Office€and€with€me€is€Jill€Sandford,Ìwho€is€with€the€New€York€attorney€general's€Office.Ì€€€€€€€€MS.€GRANT:€€Susan€Grant,€National€ConsumersÌLeague.Ì€€€€€€€€MS.€WILLIAMS:€€Kim€Williams,€Southwestern€BellÌTelephone€Company,€representing€Southwestern€Bell€andÌPacific€Bell.Ì€€€€€€€€MR.€STEIMEL:€€Walt€Steimel,€Junior,€Hunton€&ÌWilliams,€representing€Pilgrim€Telephone,€Inc.Ì€€€€€€€€MR.€DICHTER:€€Joel€Dichter€on€behalf€of€theÌInternational€Telemedia€Association.€€With€me€are€RoyÌElliott,€Executive€Director€and€Toby€Padgham,€AssociateÌÐ	   	 ì,'2   ÐDirector€of€the€organization.Ì€€€€€€€€MR.€KLUG:€€Don€Klug,€MCI.Ì€€€€€€€€MR.€HERTZENDORF:€€Mark€Hertzendorf,€Âé¶¹´«Ã½ÌTrade€Commission€from€the€Bureau€Of€economics.Ì€€€€€€€€MS.€SCHWANKE:€€Marianne€Schwanke,€Bureau€ofÌConsumer€Protection,€Âé¶¹´«Ã½€Trade€Commission.Ì€€€€€€€€MS.€HARRINGTON:€€Good.Ì€€€€€€€€Now€I€would€like€to€take€as€brief€a€period€ofÌtime€as€we€can€but€certainly€no€more€than€the€next€35Ìminutes€for€each€of€you€to€introduce€yourselves€and€toÌmake€a€very€brief€statement€of€what€your€interest€is€inÌthis€proceeding,€and€we€would€like€to€hear€from€you.ÌOne€of€the€requirements,€as€you€know,€for€all€of€you€toÌbe€seated€at€this€table€is€that€you€not€only€file€aÌcomment€but€read€the€comments€of€others.€€So,€you€shouldÌassume€that€we€all€know€everything€that€you€have€writtenÌin€your€comments,€and€we€don't€want€you€to€rehash€that.Ì€€€€€€€€What€we€want€to€know,€I€think,€is€what€you€careÌabout€most,€what€your€group€is€most€concerned€about.€€WeÌare€interested€--€we€are€all€stakeholders.€€We€areÌinterested€in€appreciating€the€most€important€concernsÌof€each€of€you€stakeholders,€and€I€am€going€to€justÌrandomly€begin€here€with€Susan,€if€that's€all€right€withÌyou.Ì€€€€€€€€MS.€GRANT:€€Sure.€€The€National€ConsumersÌÐ	   	 ì,'2   ÐLeague€--Ì€€€€€€€€MS.€HARRINGTON:€€Could€you€say€your€name€again?Ì€€€€€€€€MS.€GRANT:€€Oh,€Susan€Grant,€vice€president€ofÌpublic€policy€at€the€National€Consumers€League€andÌdirector€of€the€National€Fraud€Information€Center.Ì€€€€€€€€The€National€Consumers€League€is€the€oldestÌnonprofit€consumer€organization€in€the€U.S.,€and€we€haveÌbeen€involved€for€some€time€in€protecting€consumers'Ìinterests€with€regard€to€telephone€services.€€We€operateÌthe€National€Fraud€Information€Center,€which€is€aÌtelephone€hotline€and€a€web€site€through€which€consumersÌcan€get€advice€about€telephone,€online€and€InternetÌsolicitations€and€report€possible€fraud,€and€we€routeÌconsumers'€reports€of€possible€fraud€to€law€enforcementÌagencies€to€alert€them€to€them.Ì€€€€€€€€I€have€read€everybody's€comments,€and€I€haveÌdone€a€short€list€of€what€I€think€are€major€concerns.ÌThe€first€is€that€presubscription€agreements€for€callingÌ800€numbers€should€be€confirmed€in€writing.€€DocumentingÌthe€agreement€would€reduce€fraud€and€disputed€charges.Ì€€€€€€€€Second,€consumers€need€as€much€information€andÌprotection€in€pay-per-call€services€using€internationalÌphone€numbers€as€in€900€number€calls.€€Frankly,€if€weÌcan't€find€a€good€solution€at€this€time,€perhaps€the€useÌof€international€numbers€for€these€purposes€should€beÌÐ	   	 ì,'2   Ðbanned.Ì€€€€€€€€Third,€pay-per-call€promotions€on€the€InternetÌmust€clearly€state€all€terms€and€conditions,€and€I€feelÌthat€this€is€a€very€complex€issue€but€one€that€theÌindustry€can€work€with€us€all€on€in€developingÌguidelines€to€ensure€adequate€disclosure€for€consumers.Ì€€€€€€€€And€finally,€consumers€should€not€be€intimidatedÌfrom€disputing€pay-per-call€charges€or€unfairly€barredÌfrom€access€to€telecommunications€services.€€InformationÌproviders€have€chosen€this€particular€medium€to€sellÌtheir€services€and€collect€payment.€€The€burden€shouldÌbe€on€them€to€show€that€consumers€made€the€calls€andÌunderstood€the€terms.€€If€they€cannot€do€that,€consumersÌshould€be€given€the€benefit€of€the€doubt€for€disputedÌcharges.Ì€€€€€€€€Thank€you.Ì€€€€€€€€MS.€HARRINGTON:€€Well,€one€of€the€reasons€that€IÌcalled€on€Susan€first€is€that€I€knew€she€would€be€theÌmodel€pupil.Ì€€€€€€€€MS.€GRANT:€€Thank€you.Ì€€€€€€€€MS.€HARRINGTON:€€And€clearly€and€succinctlyÌstating€interests.€€That€was€perfect,€so€all€of€youÌshould€do€it€just€like€Susan.Ì€€€€€€€€Now,€I€am€going€to€randomly€call€on€someoneÌarbitrarily,€who€might€have€a€slightly€differentÌÐ	   	 ì,'2   Ðposition.Ì€€€€€€€€MR.€ANGEL:€€I€am€here€representing€theÌInteractive€Services€Association,€and€the€ISA€has€beenÌan€active€participant€in€virtually€all€of€the€issuesÌthat€concern€telephone€information€services€and€theÌemerging€area€of€online€and€Internet€services.€€We€haveÌseveral€interests.Ì€€€€€€€€We€would€like€to€essentially€refine€the€rulesÌthat€were€adopted€in€order€to€institute€some€reformsÌthat€will€make€possible€more€effective€and€efficient€useÌof€these€services.€€The€types€of€reforms€that€we'reÌlooking€for€are€modification€of€the€advisory€that€isÌcontained€in€the€bill€insert.Ì€€€€€€€€We're€looking€to€finetune€and€enforce€theÌstandards€and€operating€procedures€that€are€used€byÌbilling€agents€in€order€to€deal€with€dispute€resolution,Ìin€order€to€have€a€well-oiled€machine€that€promptlyÌadministers€justice€and€gives€timely€notice€to€allÌparties€involved.Ì€€€€€€€€We€are€also€participating€to€ensure€that€theÌinvestment€that€we€have€made€in€this€industry€is€notÌdiluted€by€rules€that€are€not€in€the€public€interest.ÌSo,€we€are€really€participating€from€a€prophylacticÌsense€to€keep€things€as€good€as€they€can€possibly€be.ÌAnd€at€the€same€time,€we're€trying€to€encourageÌÐ	   	 ì,'2   Ðinnovation€in€our€industry,€invite€other€parties€thatÌmight€use€different€dialing€patterns€into€the€industryÌbut€to€play€by€the€same€rules€that€the€rest€of€theÌindustry€is€playing€by.Ì€€€€€€€€That's€it.Ì€€€€€€€€MS.€HARRINGTON:€€Excellent.€€Thank€you,€Albe.Ì€€€€€€€€Let's€turn€to€a€different€perspective€yet€againÌand€here€from€the€Florida€Public€Service€Commission.Ì€€€€€€€€Alan€Taylor,€would€you€tell€us€what€yourÌinterest€is?Ì€€€€€€€€MR.€TAYLOR:€€Yes,€thank€you.Ì€€€€€€€€I'm€here€because€in€my€opinion€consumerÌsafeguards€that€currently€exist€are€not€effective.€€TheÌdialing€blocks€that€are€allowed€in€the€current€rules€doÌnot€stop€consumers€from€being€billed€for€informationÌservices.Ì€€€€€€€€I€think€that€what€I€would€hope€would€happen€hereÌis€if€calls€are€going€to€be€--€if€the€definition€is€notÌamended€to€include€these€other€access€codes,€then€weÌneed€to€send€a€clear€message€that€the€responsibility€isÌon€the€information€provider€to€obtain€--€to€obtainÌauthorization€for€any€calls€that€originate€to€any€otherÌservice€access€code.Ì€€€€€€€€I€would€like€to€make€sure€that€the€rules€thatÌare€adopted€allow€for€a€billing€block€option€should€theÌÐ	   	 ì,'2   ÐÂé¶¹´«Ã½€Communications€Commission€adopt€this€method€ofÌgiving€consumers€additional€safeguards,€and€I€see€thatÌas€allowing€consumers€who€have€900€blocking€--€I€seeÌthis€as€giving€them€the€tools€to€block€billing€for€otherÌservice€access€codes€if€they€so€choose€on€an€affirmativeÌbasis.€€I'd€like€to€make€sure€the€definition€isÌbroadened€or€that€all€calls€are€restricted€to€the€900Ìservice€access€code.Ì€€€€€€€€MS.€HARRINGTON:€€Thank€you,€Alan.Ì€€€€€€€€While€we're€hearing€about€calls€outside€of€theÌ900€dialing€pattern,€let's€turn€to€Joel€Dichter,€whoÌrepresents€some€of€the€interests€that€are€using€non-900Ìdialing€patterns,€and€hear€what€your€group's€interestsÌare.Ì€€€€€€€€MR.€DICHTER:€€Thank€you,€Eileen.Ì€€€€€€€€I€represent€the€International€TelemediaÌAssociation,€which€consists€of€service€bureaus,€carriersÌand€providers€of€international€audiotext€servicesÌthrough€the€various€other€dialing€patterns€like€011€andÌ809,€et€cetera,€and€we€are€aware€--€the€industry€isÌaware€of€the€concerns€that€have€been€raised€by€theÌgroups€around€this€table,€including€Susan€and€Mr.€TaylorÌfrom€Florida,€and€we€are€here€because€we€want€to€addressÌthem.€€We€have€tried€to€come€out€with€a€code,€set€someÌstandards€in€the€industry.ÌÐ	   	 ì,'2   Ð€€€€€€€€We€want€your€input.€€I€am€sure€with€Susan€we€canÌget€together€and€find€solutions€to€these€areas€and€inÌsuch€a€way€that€the€industry€can€continue€to€grow€on€aÌglobal€scale€and€protect€consumers€at€the€same€time.Ì€€€€€€€€MS.€HARRINGTON:€€Thanks,€Joel.Ì€€€€€€€€Well,€let's€hear€from€yet€another€perspective,Ìthat€of€the€LEC.Ì€€€€€€€€Kim,€do€you€want€to€talk€to€us€aboutÌSouthwestern€Bell's€interests?Ì€€€€€€€€MS.€WILLIAMS:€€Yes,€Kim€Williams.Ì€€€€€€€€From€my€perspective,€I€think€Southwestern€BellÌbelieves€that€the€900€rules€were€effective€in€cleaningÌup€900,€and€we€applaud€those€efforts;€however,€we€thinkÌthat€everybody€jumped€to€other€dialing€codes€as€soon€asÌthose€rules€went€in,€and€that's€where€our€concern€liesÌnow,€is€that€there€is€always€a€way€around€whateverÌprotections€are€afforded€consumers.Ì€€€€€€€€The€complaints€we€see€today€about€900€have€justÌabout€disappeared.€€The€only€ones€that€do€seem€to€comeÌin€are€those€where€900€calls€were€never€made€but€billingÌwas€submitted€for€900€calls.€€So,€monthly€fees€andÌthings€similar€to€that€are€being€submitted€under€900Ìnumber€dialing€patterns€when€no€calls€were€ever€made.Ì€€€€€€€€We're€concerned€about€those€things€coming€in€onÌour€bill.€€We€don't€think€the€LEC€is€the€place€to€stopÌÐ	   	 ì,'2   Ðthat,€because€we€can't€tell€whether€a€call€was€a€goodÌcall€or€a€bad€call€when€it€comes€in€to€us€for€billing.ÌWe€can€only€trust€that€our€billing€customers€areÌsubmitting€to€us€legitimate€billing.Ì€€€€€€€€In€the€same€respect,€international€causes€theÌsame€problem.€€A€call€to€another€country€is€a€call€toÌanother€country€when€it's€submitted€to€us€for€billing.ÌWe€can't€tell€if€it€is€similar€to€a€pay-per-call€serviceÌor€if€it's€truly€an€international€call,€and€we€thinkÌthat€issue€needs€to€be€addressed€so€that€consumers€canÌbe€protected.Ì€€€€€€€€The€same€rules€that€have€applied€to€the€900Ìpay-per-call€services€we€think€need€to€be€applied€to€allÌpay-per-call€audiotext€services€to€protect€consumers,Ìand€I€don't€think€the€LEC€is€the€place€to€stop.ÌStopping€the€billing€from€the€LEC€doesn't€stop€theÌcustomer€from€being€billed.€€There€are€alternative€waysÌto€bill€these€services.Ì€€€€€€€€The€LEC€is€not€the€only€option€for€billing,€soÌhow€do€you€stop€a€customer€from€being€billed€forÌsomething?€€You€really€need€to€stop€the€call€from€beingÌmade€or€stop€the€service€from€being€provided€in€a€mannerÌthat€is€not€on€the€up€and€up.Ì€€€€€€€€MS.€HARRINGTON:€€Thank€you,€Kim.Ì€€€€€€€€All€right,€a€different€perspective€from€RichardÌÐ	   	 ì,'2   ÐGordon.Ì€€€€€€€€MR.€R.€GORDON:€€I'm€Richard€Gordon,€chairman€ofÌthe€Teleservices€Industry€Association,€and€our€purposeÌhere€today€and€what€we're€trying€to€do,€I€think,€is€inÌconcert€with€everyone€at€the€table€in€that€while€thisÌmay€be€officially€known€as€the€Âé¶¹´«Ã½€Trade€Commission,Ìwe€on€the€TSIA€front€believe€that€it's€really€known€asÌthe€"Fair€Trade€Commission."Ì€€€€€€€€One€of€the€things€that's€happened€as€a€result€ofÌthe€pendulum€--€and€when€I€speak€of€the€pendulum,€what€IÌmean€is€back€in€the€late€eighties€and€early€nineties,Ìthere€were€a€lot€of€--€there€was€a€lot€of€confusion€andÌthere€were€a€lot€of€consumer€abuses€where€some€unsultryÌcharacters€did€take€advantage€of€people€because€theyÌdidn't€understand€--€the€consumer€didn't€understand€theÌtechnology.€€TDDRA€came€along,€and€it€set€a€standard,Ìbut€it€didn't€do€the€job€completely.Ì€€€€€€€€As€an€example,€the€regulations€say€that€theÌconsumer€has€a€right€to€charge€back€a€transaction€withinÌ60€days;€however,€there€is€no€enforcement€of€that.ÌThere€have€been€multi-million€dollar€businessesÌdestroyed€in€the€mid-nineties€when€chargebacks€came€backÌthat€were€a€year,€year€and€a€half€and€two€years€old.Ì€€€€€€€€I€challenge€anyone€at€the€table,€including€theÌvarious€state€attorney€generals,€to€stay€in€business€ifÌÐ	   	 ì,'2   Ða€year€after€you've€collected€your€taxes,€suddenly€halfÌof€them€disappear€in€the€form€of€some€form€ofÌchargeback.€€I€think€Congressman€Gordon€has€become€veryÌsensitive€and€very€aware€to€the€fact€that€what'sÌhappened€here€is€chargebacks€have€become€so€easy€that€itÌis€actually€a€situation€where€the€consumers€are€nowÌtaking€advantage€of€the€industry.€€I€don't€know€of€anyÌindustry€in€the€world€that€can€support€a€50€percentÌchargeback€rate€or€a€50€percent€refund€rate.Ì€€€€€€€€Secondarily,€we€are€working€with€hindsight.€€TheÌwork€that€was€done€here€in€1992€and€1993€certainly€wasÌresponsive€to€and€a€reaction€to€what€was€happening.€€TheÌTSIA€didn't€exist€at€that€point€in€time.€€The€TSIA€wasÌformed€a€year€and€a€half€ago€at€the€request€of€15Ìindustry€leaders€because€we€felt€it€was€important€as€anÌindustry€to€self-regulate€and€to€self-police.Ì€€€€€€€€Today,€we€represent€over€a€thousand€differentÌcompanies€in€the€industry,€a€fact€that€I€think€isÌimportant€that€everyone€know€about,€is€the€TSIA€sendsÌout€on€average€a€letter€a€day€to€people€in€the€industryÌthat€the€TSIA€staff€find€are€in€some€way€violating€theÌcode€of€ethics,€a€voluntary€code€of€ethics.€€I€don'tÌthink€there€is€any€funding€in€any€government€agency€thatÌwould€support€the€level€of€research,€self-police€andÌself-enforcement€that€is€happening€as€the€result€of€theÌÐ	   	 ì,'2   ÐTSIA's€efforts.€€And€part€of€our€mission€here€today€isÌto€communicate€to€all€of€you€exactly€what€we€as€a€tradeÌassociation€are€doing.Ì€€€€€€€€When€it€comes€to€enforcement,€there€is€nothingÌbetter€as€a€method€of€enforcement€than€to€stop€theÌmoney.€€If€people€are€promoting€something€and€they€can'tÌget€paid€for€their€promotion,€the€promotion€will€stop.ÌAgain,€on€a€voluntary€basis,€there€are€many,€many,€manyÌof€our€representatives€here€today€that€will€be€able€toÌtestify€about€the€fact€that€as€soon€as€a€violation€isÌfound,€the€money€is€stopped€on€a€voluntary€basis.€€TheÌservice€bureaus€and€the€international€players€freeze€theÌaccounts€of€the€companies€that€are,€in€fact,€violating.Ì€€€€€€€€I€don't€think€anyone€today€would€be€able€to€findÌin€any€of€the€publications€the€use€of€the€word€"free"Ìbecause€the€industry€has€banded€together€in€order€toÌmake€sure€that€consumers€recognize€that€these€are€notÌfree€services.€€The€use€of€the€word€"free"€has€beenÌeliminated€from€99€percent€of€all€the€advertising.€€InÌfact,€the€publishers€call€and€talk€to€each€otherÌfrequently€about€this.Ì€€€€€€€€The€problem€is€that€while€we€have€eliminated€theÌword€"free"€from€the€advertising,€because€the€wording€onÌthe€consumer€disclosure€notice€is€not€uniform,€is€notÌprecise,€and€is€not€concise,€the€consumer€reads€thatÌÐ	   	 ì,'2   Ðnotice€of€their€rights€and€says,€Oh,€this€is€free.Ì€€€€€€€€We€need€to€bring€the€pendulum€back€into€theÌmiddle€where€the€consumer€and€the€provider€have€adequateÌbalance,€and€it's€our€effort€here€and€it's€our€intentÌhere€to€try€to€educate€and€to€learn€so€that€we€will€beÌable€to€work€with€the€Commission€and€truly€have€a€FairÌTrade€Commission.Ì€€€€€€€€Thank€you.Ì€€€€€€€€MS.€HARRINGTON:€€Thank€you,€Richard.Ì€€€€€€€€Let's€hear€from€Don€Klug.Ì€€€€€€€€MR.€KLUG:€€Don€Klug,€senior€manager€for€900Ìservices€at€MCI.€€Thank€you,€Eileen.Ì€€€€€€€€MCI's€interests€in€this€proceeding€are€to€reviewÌand€modify€TDDRA€as€appropriate€to€ensure€that€theÌpay-per-call€industry€can€continue€to€grow€at€a€healthyÌrate.Ì€€€€€€€€Kim€Williams€mentioned€that€consumer€complaintsÌon€900€are€almost€nil.€€MCI€in€1991€had€about€20,000Ìconsumer€complaints€on€900€calls.€€In€1996,€we€had€200.ÌThat's€under€1€percent.€€That's€quite€a€drop€in€fiveÌyears,€and€I€think€that's€much€to€the€credit€of€the€FTCÌand€the€industry€in€terms€of€recognizing€abuse€in€theÌindustry€and€implementing€legislation€to€change€that.Ì€€€€€€€€Representative€Gordon€also€said€it's€a€two-edgedÌsword.€€We€need€to€be€concerned€about€consumerÌÐ	   	 ì,'2   Ðprotection,€but€we€also€need€to€recognize€consumerÌresponsibility.€€As€Richard€Gordon€pointed€out,€theÌpendulum€as,€indeed,€swung.Ì€€€€€€€€And€I€think€another€thing€to€keep€in€mind€inÌthese€proceedings€is€not€only€has€the€industry€changedÌin€the€five€years,€but€I€think€some€of€the€applicationsÌhave€changed,€as€well.€€Last€year,€MCI€co-sponsored€aÌfund-raising€900€application€with€the€Hearst€publicationÌLe€Clair€and€were€able€to€raise€over€$50,000€for€breastÌcancer€research.€€So,€I€think€people€are€findingÌinnovative€ways€to€use€the€technology€for€otherÌpurposes.Ì€€€€€€€€MCI€has€a€900-77€--€733€prefix€dedicated€toÌbusiness-to-business€applications€and€AT&T€has€anÌ800-955.€€So,€for€those€reasons€I€think€the€industry€hasÌmuch€changed.Ì€€€€€€€€MS.€HARRINGTON:€€Thank€you,€Don.Ì€€€€€€€€Let's€hear€about€other€uses€and€interests€fromÌLinda€Goldstein.Ì€€€€€€€€MS.€GOLDSTEIN:€€Thank€you,€Eileen.Ì€€€€€€€€The€PMAA€represents€many€of€the€Fortune€500Ìcompanies€in€this€country€in€connection€with€theirÌvarious€advertising,€promotion€and€marketingÌactivities.€€So,€our€primary€concern€really€relates€toÌthe€aspects€of€the€rule€as€they€might€impact€upon€theÌÐ	   	 ì,'2   Ðuse€of€this€medium€by€our€members€and€the€manner€inÌwhich€the€programs€that€our€members€might€design€wouldÌbe€advertised€and€promoted€to€the€public.Ì€€€€€€€€We€basically€have€three€primary€interests€--€orÌI€should€say€four€primary€interests€in€this€proceeding.ÌOne€is€that€we€do€believe€that€the€rule€has€been€highlyÌeffective€in€eradicating€many€of€the€abuses€thatÌprompted€the€implementation€of€the€rule,€and€we€have€aÌstrong€interest€in€seeing€that€for€the€most€part€theÌrule€is€maintained€as€status€quo.€€In€that€regard,€weÌwould€be€sorry€to€see€much€additional€regulation€orÌadditional€burden€imposed,€particularly€in€the€areas€ofÌadvertising€or€promotion€or€any€additional€regulationsÌrelating€to€sweepstakes.Ì€€€€€€€€I€think€that€our€experience€with€sweepstakesÌwould€parallel€the€experience€that€Don€Klug€mentioned€inÌthat€the€incidence€of€complaints€in€that€area€hasÌcertainly€dropped,€the€number€of€applications€haveÌdropped,€and€the€elimination€of€many€of€the€abuses€hasÌnow€opened€the€way€for€many€of€our€members€who€were€notÌas€prone€to€utilize€900€as€a€medium€to€begin€to€use€itÌin€increasing€numbers€today.Ì€€€€€€€€I€would€also€point€out€that€the€telephone,€whileÌthere€has€been€obviously€much€expansion€in€the€use€ofÌonline,€the€telephone€remains€an€attractive€medium€forÌÐ	   	 ì,'2   Ðour€members,€because€its€reach€still€exceeds€that€of€theÌcomputer.€€So,€to€the€extent€that€it€allows€our€membersÌto€conduct€interactive€types€of€promotions€and€programsÌwith€its€consumers€as€a€way€of€building€brand€loyalty,Ìit€remains€an€important€issue€to€our€members.Ì€€€€€€€€In€terms€of€the€substantive€areas€of€the€rule€--Ìand€in€this€rule€review,€there€are€really€threeÌprincipal€areas€that€we€have€an€interest€in.€€We€supportÌthe€ISA's€proposals€in€terms€of€reform€to€the€billingÌnotice€and€a€review€of€the€LEC€billing€and€collectionÌprocedures.€€To€the€extent€that€we€can€--€we€also€haveÌfound€that€the€high€chargeback€rate€continues€to€act€asÌa€disincentive€to€certain€of€our€members€to€embrace€900Ìnumber€as€a€medium,€and€to€the€extent€that€someÌreduction€of€the€chargeback€rate€can€be€accomplished,€weÌbelieve€that€the€integrity€of€the€medium€and€itsÌattraction€to€our€members€will€be€further€restored.Ì€€€€€€€€The€second€area€in€which€we€have€a€concernÌrelates€to€the€offering€of€free€periods€of€time€or€whatÌwe€refer€to€as€some€sort€of€a€premium€or€samplingÌprogram€related€to€interactive€services.€€We€believeÌthat€there€is€presently€an€ambiguity€in€the€rules,€thatÌthat€ambiguity€should€be€corrected€to€allow€providers€ofÌaudiotext€services€to€allow€consumers€to€sample€or€tryÌthe€service€much€the€same€as€they€are€allowed€to€try€andÌÐ	   	 ì,'2   Ðsample€other€forms€of€product€or€service€offered€by€ourÌmembers€without€the€additional€restrictions€that€theÌadvisory€opinion€issued€last€spring€might€suggest.Ì€€€€€€€€And€thirdly,€we€have€a€very€strong€interest€inÌwhatever€position€the€Commission€may€take€vis-a-visÌregulation€of€online€services.€€And€that€is€not€such€--Ìcertainly€the€PMAA€does€not€want€to€see€the€online€arenaÌbecome€fraught€with€any€of€the€types€of€abuse€thatÌplagued€this€industry€in€1992,€but€our€concern€really€isÌthat€any€advertising€types€of€restrictions€orÌregulations€or€type€size€or€placement€requirements€thatÌmight€be€imposed€in€the€context€of€this€proceeding€wouldÌhave€precedential€impact€beyond€the€confines€ofÌpay-per-call,€and€we€feel€that€the€whole€issue€of€onlineÌadvertising€and€promotion€is€an€area€that€really€shouldÌbe€looked€at,€if€at€all,€in€the€context€of€a€separateÌproceeding€in€which€the€aspects€unique€to€that€medium,Ìthe€specific€technological€aspects€and€the€technologicalÌdifferences€that€are€unique€to€that€medium€can€really€beÌexplored.€€So,€we€would€hope€that€the€Commission€wouldÌact€with€caution€in€that€regard.Ì€€€€€€€€MS.€HARRINGTON:€€Thank€you,€Linda.Ì€€€€€€€€Peter,€let's€hear€from€you.Ì€€€€€€€€MR.€BRENNAN:€€Thank€you.€€I'm€Peter€Brennan€fromÌTele-Publishing€in€Boston,€Massachusetts.ÌÐ	   	 ì,'2   Ð€€€€€€€€I've€participated€in€these€hearings,€in€theÌtestimony€before€some€of€the€Congressional€and€SenateÌcommittees€that€led€to€TDDRA€initially,€so€I€was€part€ofÌthe€alumni,€I€suppose.€€So,€welcome€back.€€I€have€aÌlittle€bit€less€hair€than€most€of€us€and€more€gray,€butÌhere€I€am.Ì€€€€€€€€Tele-Publishing,€our€company,€is€the€world'sÌlargest€supplier€of€voice€personals.€€I€won't€embarrassÌany€of€you€by€asking€if€you€have€tried€them,€but€if€youÌhave€tried€a€voice€personal€on€the€television,€radio€orÌInternet,€this€is€a€mainstream€product.€€Ninety-six€ofÌthe€top€hundred€daily€newspapers€in€the€United€StatesÌuse€them,€and€the€percentage€is€higher€when€you€get€intoÌtop€than€the€top€hundred€newspapers.Ì€€€€€€€€Voice€personals€account€for€about€35€percent€ofÌthe€current€900€number€domestic€business,€and€about€12Ìto€15€percent€of€singles€above€college€age€in€the€UnitedÌStates€use€these€services.€€It€also€is€a€service€thatÌhistorically€has€among€the€lowest€rates€of€chargebacksÌin€the€industry.Ì€€€€€€€€Our€primary€concern€here€is€a€fair€marketplaceÌand€integrity€of€the€billing€and€collection€process€andÌthe€billing€and€collection€system.€€So,€our€interest€isÌin€pursuing€that.Ì€€€€€€€€I€would€also€--€just€two€additional€notes.€€I€amÌÐ	   	 ì,'2   Ðalso€the€chairman€of€the€board€of€directors€of€theÌInteractive€Services€Association,€so€even€though€we€areÌ--€the€ISA€is€ably€represented€to€you€by€Albe€and€byÌWarren€Miller,€I€wanted€to€raise€that€notice,€as€well,Ìand€I€also€wanted,€since€I€have€told€you€who€we€are,€toÌtell€you€who€we€are€not.€€Please,€make€no€mistake,Ìaccept€no€imitations,€Tele-Publishing€is€not€theÌTelephone€Publishing€Corporation€which€was€recently€theÌsubject€of€a€huge€liability€and€played€a€huge€fine€forÌtheir€problems.€€That's€not€us,€that's€them.€€ThankÌyou.Ì€€€€€€€€MS.€HARRINGTON:€€Thank€you,€Peter.Ì€€€€€€€€Jon,€what€about€AT&T's€interests?Ì€€€€€€€€MR.€SHAUB:€€Good€morning,€I'm€Jon€Shaub,€productÌmanager€for€AT&T€900€services.€€AT&T's€interest€in€thisÌis€stimulating€healthy,€positive€perceived€growth€in€theÌ900€industry.€€For€reasons€similar€to€MCI,€I'm€sure,€ifÌthe€industry€doesn't€grow,€AT&T€can't€grow€in€this€partÌof€the€business.Ì€€€€€€€€Very€much€in€line€with€that€growth€is€perceptionÌof€people€who€are€not€using€900€services,€businessesÌthat€are€not€using€it,€perceptions€that€may€still€existÌas€to€the€high€chargeback€rates€that€are€agreed€to,€alsoÌperceptions€that€it€is€an€entertainment-only€service€andÌdoes€not€have€valid€business€use.€€So,€we€are€willing€toÌÐ	   	 ì,'2   Ðhelp€with€anything€that€works€to€disspell€thatÌperception.Ì€€€€€€€€MS.€HARRINGTON:€€Okay,€thank€you.Ì€€€€€€€€Walt,€can€we€hear€from€you€and€Pilgrim'sÌperspective?Ì€€€€€€€€MR.€STEIMEL:€€Hi,€I'm€Walt€Steimel€with€Hunton€&ÌWilliams€representing€Pilgrim.Ì€€€€€€€€We€participated€in€this€four€years€ago,€I€was€atÌthe€table€for€Pilgrim€at€that€time,€so€I€thank€you€forÌthe€opportunity€for€letting€us€come€back.Ì€€€€€€€€Our€primary€interests€are,€one,€recognizing€thatÌinformation€services€encompasses€a€number€of€services,Ìenhanced,€pay-per-call,€information,€telemessaging,Ìvoicemail€and€others€and€that€whatever€rules€are€adoptedÌshould€equally€affect€on€a€nondiscriminatory€basis€allÌof€those€services,€and€that's€the€breadth€of€informationÌservices€that€are€out€there.€€It's€really,€really€largeÌand€continuing€to€grow.Ì€€€€€€€€Secondly,€we€want€to€ensure€the€effectiveÌoperation€of€all€the€platforms,€the€dialing€and€billingÌplatforms€permitted€under€statute.€€It€seems€like€to€usÌthat€there€are€at€least€three€platforms€that€wereÌrecognized€and€permitted,€900€access,€800€and€otherÌaccess€with€credit€cards€and€calling€cards,€and€then€800Ìand€other€access€with€written€presubscription.€€So,€youÌÐ	   	 ì,'2   Ðhave€a€written€with€notification€only€once€of€all€theÌconditions;€you€have€a€nonwritten€access,€non-900,Ìnonwritten€with€notification€on€every€single€calm;€andÌthen€900€access.€€We€want€to€make€sure€that€whateverÌrules€come€out€of€this€forum€continue€to€ensure€theÌeffective€operation€of€all€these€platforms.Ì€€€€€€€€We€also€want€to€ensure€the€nondiscriminatoryÌprovision€of€billing€and€transport€for€all€informationÌservices,€regardless€of€the€dialing€platform€and€theÌaccounting.Ì€€€€€€€€Should€I€wait€for€the€police€to€go€by?Ì€€€€€€€€MS.€HARRINGTON:€€Yes,€please.€€It€could€be€anÌimportant€person.€€It€might€not€be€the€police.€€We're€inÌWashington€on€Pennsylvania€Avenue.Ì€€€€€€€€MR.€STEIMEL:€€We€also€would€like€to€seeÌencouragement€of€full€access€to€900€and€other€blockingÌinformation.€€Blocking€information€is€currently€providedÌat€four€different€points€in€the€dialing€system.€€ThereÌis€900€blocking€in€the€local€exchange€carrier€CO,€whichÌis€not€available€to€interexchange€carriers€andÌinformation€providers.€€They€are€information€digits€thatÌare€taken€downline.Ì€€€€€€€€Then€interexchange€carriers€and€informationÌproviders€have€their€own€blocking€data€base,€then€thereÌis€the€information€contained€in€LIDB.€€All€of€thoseÌÐ	   	 ì,'2   Ðitems€should€be€available€to€every€party€who€is€carryingÌany€information€service€call€so€that€they€can€use€thatÌ--€use€that€blocking€information€to€prevent€consumersÌthat€don't€want€access€and€information€services€fromÌgetting€onto€those€platforms.Ì€€€€€€€€So,€that€would€be€more€of€our€request€for€fullÌcompetitive€parity€between€all€information€serviceÌproviders€and€interexchange€carriers.€€We€would€likeÌfull€provision€of€the€billing€options€to€permit€theÌTDDRA-required€disclosures€to€be€provided€to€consumersÌfor€all€information€services,€not€just€the€ones€thatÌhave€traditionally€been€provided,€and€withoutÌrestrictions€on€the€dialed€number,€description,€contentÌor€any€other€restriction€in€the€computerized€billingÌprocess,€so€that€carriers€can€at€their€discretion€alwaysÌprovide€the€disclaimer€to€consumers€for€anything€that€isÌnot€simply€1-plus€calling€your€grandmother.Ì€€€€€€€€Those€are€our€primary€interests€in€participatingÌin€this€proceeding,€and€we€look€forward€to€the€commentsÌof€the€other€parties€over€the€next€two€days.Ì€€€€€€€€MS.€HARRINGTON:€€Thank€you,€Walt.Ì€€€€€€€€I€mentioned€that€our€most€important€partner€hereÌat€the€FTC€is€the€National€Association€of€AttorneysÌGeneral€in€the€states€in€enforcement€and€in€sort€ofÌneedling€out€these€policies,€and€I€have€saved€the€lastÌÐ	   	 ì,'2   Ðword€on€this€opening€statement€of€interests€for€DavidÌGillis,€who€is€representing€the€state€attorneysÌgeneral.Ì€€€€€€€€MR.€GILLIS:€€Thank€you€very€much,€Eileen.Ì€€€€€€€€It's€good€to€be€here€today.€€I€also€was€hereÌsome€time€ago€when€the€first€rule€was€the€subject€of€aÌsimilar€workshop,€and€at€that€time,€the€state€attorneyÌgenerals€were€involved€and€under€the€auspices€of€theÌNational€attorney€general€Association,€which€has€aÌspecific€subcommittee€involving€representatives€of€40Ìstates,€and€Jill€and€I€serve€on€that€subcommittee,€andÌthat's€what€brings€us€here€today.Ì€€€€€€€€As€the€chief€law€enforcement€officers€in€theÌstates,€consumers€look€to€the€state€attorney€general€toÌdeal€when€they€find€problems€with€--€in€the€marketplace,Ìwhen€they€feel€they€have€been€treated€unfairly€orÌsomeone€has€taken€advantage€of€them.€€And€unfortunatelyÌfrom€the€inception€of€the€900€number€industry€there€hasÌbeen€a€considerable€number€of€complaints€that€have€beenÌfiled€with€the€offices€of€state€attorney€generals.Ì€€€€€€€€Fortunately,€through€the€efforts€of€the€Âé¶¹´«Ã½ÌTrade€Commission€and€the€Âé¶¹´«Ã½€CommunicationsÌCommission,€as€well€as€industry€representatives,€theÌcomplaints€about€900€numbers€have€declined,€but€asÌeveryone€has€noted,€we€have€seen€problems€migrate€toÌÐ	   	 ì,'2   Ðother€dialing€patterns.Ì€€€€€€€€There€are€three€initial€points€I€would€like€toÌstress.€€The€first€is€that€we€believe€the€approach€takenÌby€the€900€number€rule€has€been€very€effective,€and€theÌreason€why€it's€been€effective€in€our€view€is€that€itÌrequires€up-front€disclosure€so€that€people€know€whatÌthey€are€getting.Ì€€€€€€€€Secondly,€it€provides€a€mechanism€to€stopÌunauthorized€call€through€call€blocking€in€the€Âé¶¹´«Ã½ÌCommunication€rule,€and€thirdly,€there€is€a€disputeÌresolution€procedure€that€is€readily€accessible€toÌpeople€who€feel€they€have€been€treated€unfairly.Ì€€€€€€€€We€want€to€see€those€protections€and€thoseÌprovisions€continued.€€To€look€at€solutions€to€theseÌproblems€simply€as€a€problem€for€enforcement€is€notÌenough.€€The€ability€of€people€to€get€into€this€industryÌwho€are€inclined€to€use€sharp€practices€is€simply€tooÌeasy,€and€the€prospect€of€enormous€gain€resulting€fromÌthose€practices€continues€to€be€an€attraction.€€And€thisÌI€submit€to€you€is€what€we€have€seen€when€we€seeÌproviders€go€to€other€dialing€services.Ì€€€€€€€€The€second€point€that€I€want€to€make€is€that€theÌproblem€of€chargebacks€should€not€be€a€basis€to€diluteÌthe€protections€of€the€rule.€€State€attorneys€generalÌprosecute€businesses€that€engage€in€fraud.€€We€certainlyÌÐ	   	 ì,'2   Ðdon't€support€consumers€that€engage€in€fraud.Ì€€€€€€€€Having€said€that,€though,€we€would€point€outÌthat€there€are€alternative€systems€that€informationÌproviders€could€use€that€could€eliminate€their€specificÌproblem€for€chargebacks.€€I€would€also€note€that€in€aÌderegulated€market,€there€are€few€guarantees,€and€thatÌthe€risk€of€who€information€providers€want€to€deal€withÌshould€be€borne€by€them,€not€the€local€exchange€companyÌand€certainly€not€the€consumer.€€So,€again,€the€secondÌpoint€is€that€the€problem€of€chargebacks€should€not€be€aÌbasis€to€diminish€the€protections€of€the€rule.Ì€€€€€€€€Finally,€we€support€--€the€state€attorneysÌgeneral,€support€expanding€the€definition€of€the€rule€toÌcover€pay-per-call€services€that€are€available€throughÌother€dialing€patterns.€€Once€again,€we€are€seeing€theÌsame€sort€of€consumer€frauds€that€were€characteristic€ofÌthe€early€use€of€900€numbers€and€international€numbers.ÌWe€are€seeing€work-at-home€schemes,€scam€travelÌofferings€and€related€types€of€services€that€do€notÌprovide€the€service€they€promise€to€provide.Ì€€€€€€€€So,€in€conclusion,€we're€here€today,€and€weÌbelieve€that€by€undertaking€this€effort,€the€Âé¶¹´«Ã½ÌTrade€Commission€will€provide€a€firm€basis€for€theÌgrowth€of€legitimate€pay-per-call€services,€yetÌcontinuing€protections€for€consumers€that€want€to€useÌÐ	   	 ì,'2   Ðthose€services€and€protections€from€unauthorized€andÌunwanted€charges.Ì€€€€€€€€Thank€you€very€much,€Eileen.Ì€€€€€€€€MS.€HARRINGTON:€€Thank€you,€Dave,€and€thank€allÌof€you.€€We€are€three€minutes€ahead€of€schedule.€€YouÌall€were€just€superb€in€this€first€session.€€You€areÌfollowing€the€rules€well.Ì€€€€€€€€Let€me€just€give€you€all€an€opportunity€to€standÌup€and€get€more€coffee.€€It's€excellent,€it's€free,€it'sÌin€the€back,€and€we€are€just€going€to€take€aÌthree-minute€stretch,€and€right€at€10:00,€we€are€goingÌto€pick€up,€and€the€first€discussion€is€going€to€be€aÌdiscussion€of€the€industry€perspective,€which€doesn'tÌmean€industry€only,€but€we€want€to€discuss€theirÌperspective€on€this€chargeback€problem.Ì€€€€€€€€Thank€you.Ì€€€€€€€€òò(A€brief€recess€was€taken.)Ð   	 Ü     Ðóó€€€€€€€€MS.€HARRINGTON:€€All€right,€let's€reconvene,Ð   	 l "   Ðplease.Ì€€€€€€€€As€the€agenda€indicates,€we€would€like€someÌdiscussion€during€this€next€segment€on€variousÌassertions€that€are€raised€from€industry€members€aboutÌthe€problem€of€chargebacks,€and€I€guess€I'd€like€toÌbegin€with€just€a€quick€check€on€a€simple€factualÌquestion,€and€that€is,€what€is€the€rate?€€We€hear€20ÌÐ	   	 ì,'2   Ðpercent,€we€hear€50€percent.Ì€€€€€€€€Mark,€do€you€want€to€phrase€that€question?€€Oh,ÌMark's€got€his€mouth€full.Ì€€€€€€€€MR.€HERTZENDORF:€€Yes.€€ISA€in€their€commentsÌindicated€that€the€overall€chargeback€rate€was€20Ìpercent.€€Perhaps€they€were€referring€strictly€to€900Ìnumbers€and€maybe€the€40€and€50€percent€figure€that'sÌbeen€touted€refers€to€particular€services€orÌinternational.€€So,€I'm€just€wondering,€is€the€figure€20Ìor€40€or€50€percent,€and€is€it€different€forÌinternational€versus€the€900€number?Ì€€€€€€€€MR.€R.€GORDON:€€If€I€may?Ì€€€€€€€€MS.€HARRINGTON:€€Richard?€€And€let€me€remind€youÌagain€that€if€you€want€to€be€recognized,€just€turn€yourÌtent€up.€€Thanks.Ì€€€€€€€€MR.€R.€GORDON:€€I€think€one€of€the€problems€hereÌis€what€is€a€chargeback€or€the€definition€of€what's€aÌchargeback,€and€if€you're€taking€a€look€at€the€technicalÌdefinition€of€what€a€chargeback€is,€the€chargeback€rateÌmay€actually€be€20-25€percent;€however,€we€asÌbusinesspeople€look€at€how€much€revenue€goes€back,€andÌit's€not€just€chargebacks.€€It's€uncollecteds,€it's€1001Ìdifferent€adjustments€that€happen,€and€I€would€beÌdelighted€to€defer€to€some€of€the€experts€behind€me€inÌthe€billing€and€collection€area.€€It's€not€justÌÐ	   	 ì,'2   Ðchargebacks.Ì€€€€€€€€The€other€thing€is€that€getting€a€true€rate€isÌalmost€impossible,€because€what's€happening€and€what€hasÌcontinued€to€happen€is€that€the€60-day€provision€in€theÌregulations€is€totally€ignored.€€If€a€consumer€calls€inÌsix€months,€eight€months,€nine€months€after€they€haveÌbeen€using€pay-per-call€services€and€they€tell€theirÌlocal€exchange€carrier,€I€never€did€this,€that€entireÌblock€of€transactions€winds€up€being€charged€back.Ì€€€€€€€€I€certainly€agree€with€the€various€comments€madeÌby€the€consumer€protection€groups€and€the€attorneyÌgenerals€where,€you€know,€if€there€is€someone€that'sÌmade€four€or€five€or€if€there€is€four€or€five€billingsÌon€a€statement€or€maybe€statements€for€a€month€or€two,Ìthat€that's€something€that€could€be€a€billing€error,€itÌcould€be€some€sort€of€mischievous€behavior€by€someone,Ìbut€we're€seeing€more€and€more€and€more€in€the€industryÌthat€some€of€the€LECs€are€actually€using€the€extremelyÌloose€interpretation€of€the€rules€almost€as€a€way€toÌoffset€their€own€bad€debt.Ì€€€€€€€€There€is€a€number€of€cases€--€and€again,€IÌbelieve€that€the€people€here€with€the€TSIA€would€be€ableÌto€testify€to€this€--€where€when€we€research€these€andÌwe€find€nine€months'€worth€of€pay-per-call€chargebacksÌsuddenly€come€back,€we€actually€find€that€a€consumerÌÐ	   	 ì,'2   Ðhasn't€paid€his€phone€bill€or€her€phone€bill€for€threeÌor€four€months.€€And€somehow,€they€realize€that€if€theyÌgot€a€chargeback€for€$600€worth€of€pay-per-call,€theÌ$200€deniable€call€records€for€which€they€could€loseÌtheir€services€was€suddenly€offset€by€this€credit,Ìbecause€they€paid€for€five€or€six€months€on€their€phoneÌbill€their€other€charges,€and€then€suddenly€they€areÌdisputing€the€entire€thing.Ì€€€€€€€€There€is€a€problem€here€with€perception,€and€theÌperception€is€that€the€900€call€is€a€completelyÌrefundable€event€irrespective€of€how€long€it's€been€onÌthe€statement.€€So,€when€you€ask€about€chargebacks,€it'sÌvery€hard€to€come€up€with€a€real€hard€number,€becauseÌtoday€it€might€be€30€percent,€but€tomorrow€you€might€getÌa€year's€worth€of€chargebacks€back€on€somebody€thatÌdrives€that€particular€program€up€to€35€or€40€percent.Ì€€€€€€€€I€hope€I've€addressed€the€issue.Ì€€€€€€€€MS.€HARRINGTON:€€Let's€hear€--€yeah,€I€wasÌactually€hoping,€Kim,€that€you€would€have€something€toÌsay€on€this.Ì€€€€€€€€MS.€WILLIAMS:€€Yes,€Kim€Williams.€€I€would€likeÌto€explain€how€our€billing€contracts€work€and€how€aÌchargeback€can€occur.Ì€€€€€€€€MS.€HARRINGTON:€€Can€you€before€you€do€thatÌanswer€the€question€about€what€is€the€rate€in€yourÌÐ	   	 ì,'2   Ðview?Ì€€€€€€€€MS.€WILLIAMS:€€I€honestly€don't€know€per€--€IÌmean,€we€track€it€per€carrier€on€a€900€basis,€and€thatÌhas€dropped€from€--€we€used€to€have€highs€of€40-45Ìpercent.€€I€would€say€that€has€dropped€for€some€carriersÌunder€10€percent,€some€still€run€at€15€or€20€percent.ÌThat's€on€900.Ì€€€€€€€€Again,€on€the€international€audiotext€side,€weÌcan't€really€track€it.€€One€international€call€is€likeÌany€other€international€call€in€our€billing€system.€€WeÌcan't€tell€which€ones€are€audiotext€and€which€onesÌaren't.€€They€are€all€international€numbers.€€So,€thereÌis€no€dialing€code€or€no€way€for€us€to€differentiate€aÌcall€to€Guyana.Ì€€€€€€€€MS.€HARRINGTON:€€And€Richard,€yes€or€no€onÌthis:€€Is€your€assessment€based€only€on€900€dialingÌpattern€calls€when€you€talk€about€this€chargeback€issueÌor€are€you€including€something€other€than€--Ì€€€€€€€€MR.€R.€GORDON:€€No,€right€now€this€is€only€onÌ900.€€That's€the€only€thing€we€have€done€the€fullÌresearch€on.Ì€€€€€€€€MS.€HARRINGTON:€€Okay.Ì€€€€€€€€Kim,€go€ahead.Ì€€€€€€€€MS.€WILLIAMS:€€Okay.€€When€we€set€up€a€billingÌand€receivables€contract,€we€basically€purchase€theÌÐ	   	 ì,'2   Ðreceivables€of€a€company€submitting€billing€to€us.€€So,Ìif€they€submit€a€hundred€dollars€worth€of€billing€to€me,ÌI€purchase€that€hundred€dollars€at€some€discountingÌrate.€€I€discount€it€for€uncollectibles,€and€for€eachÌcarrier€that's€set€for€whatever€that€carrier's€rate€is.ÌIf€it's€3€percent,€then€I€deduct€the€3€percent€forÌuncollectibles.€€I€deduct€another€percentage€for€anÌadjustment€rate.€€So,€out€of€the€hundred€they€sent€me,€IÌpay€them€90.€€Does€that€make€sense?Ì€€€€€€€€MS.€HARRINGTON:€€Question:€€Do€you€mean€carrierÌor€information€provider?Ì€€€€€€€€MS.€WILLIAMS:€€I€am€saying€carrier.€€Billing€andÌcollection€customer,€which€in€my€opinion€is€not€an€IP.ÌIt€is€a€carrier€or€billing€clearinghouse€who€may€alsoÌprovide€some€information€services,€probably€bills€fromÌmany€companies€who€do€provide€information€services.Ì€€€€€€€€MS.€HARRINGTON:€€Thank€you.Ì€€€€€€€€MS.€WILLIAMS:€€So,€when€I€purchase€that€accountsÌreceivable,€I€am€taking€it€minus€a€certain€level€ofÌuncollectibles€and€adjustments.€€I€bill€it€to€an€endÌuser€customer€and€get€payment€from€them€some€number€ofÌdays€later,€and€it€--€truthfully,€my€payment€to€theÌcarrier€is€based€on€a€number€of€days€later€that€I€knowÌthat€customer€is€going€to€pay.€€So,€I€may€pay€that€$90Ì40€days€after€I€receive€it€from€the€B&C€customer.€€So,ÌÐ	   	 ì,'2   Ðis€everybody€following€me€on€that?Ì€€€€€€€€So,€when€I€do€that,€I€purchase€it,€but€I€don'tÌpurchase€it€expecting€to€eat€that€--€any€of€that€moneyÌthat's€not€paid.€€As€I€said,€I€get€--€I€don't€pay€themÌfor€what€I€think€adjustments€and€uncollectibles€willÌbe.€€So,€I€bill€the€customer,€the€customer€I'm€assumingÌis€going€to€pay€his€charges.€€If€he€calls€me€and€asksÌfor€an€adjustment,€depending€on€whether€I€do€thatÌcarrier's€billing€inquiry€or€not,€which€means€handle€theÌend€user€customer's€questions,€I€may€issue€anÌadjustment,€or€if€the€carrier€--€if€the€B&C€customerÌhandles€the€billing€inquiry,€I€may€refer€him€back€to€theÌcarrier€or€customer€who€bills€to€me.Ì€€€€€€€€So,€if€an€end€user€calls€me€and€says€I€didn'tÌmake€these€900€calls,€if€I€do€billing€inquiry,€I€handleÌthat€complaint.€€If€I€don't,€I€pass€him€back€to€the€B&CÌcustomer.€€If€he€said€he€didn't€make€the€calls,€I€goÌthrough€certain€steps€to€try€to€sustain€the€charges€toÌsee€who€could€have€made€the€calls,€what€time€were€theÌcalls€made,€does€this€customer€normally€make€900-chargedÌcalls.Ì€€€€€€€€In€the€end,€if€the€customer€still€refuses€toÌpay,€I€don't€really€have€an€alternative€other€than€toÌremove€those€charges€from€the€bill.€€I€am€not€going€toÌeat€the€charges€myself,€Southwestern€Bell,€and€theÌÐ	   	 ì,'2   Ðcustomer,€if€he's€not€going€to€pay€them,€I€can't€takeÌaway€his€local€service€for€nonpayment.€€So,€I€eitherÌleave€the€money€out€there€forever€or€I€send€it€back€toÌthe€carrier,€and€--€or€to€the€B&C€customer.€€So,€in€thisÌcase,€I€would€send€it€back€if€the€customer€can't€pay.Ì€€€€€€€€When€he€calls€me€today,€60€days€from€now,€90Ìdays€from€now,€a€hundred€days€from€now,€I€don't€reallyÌhave€a€choice€other€than€either€leave€that€balance€outÌthere€forever,€and€in€that€case€I've€purchased€theÌaccounts€receivable,€so€it's€my€money€now€that€I'm€notÌgetting€collected,€or€I€send€it€back€to€the€company€whoÌsent€it€to€me€for€billing.Ì€€€€€€€€MS.€HARRINGTON:€€Do€you€ever€--€do€you€everÌexplore€the€option€of€bringing€some€sort€of€action€toÌcollect?Ì€€€€€€€€MS.€WILLIAMS:€€On€900€charges€--€well,€on€--€asÌfar€as€collection€goes,€my€action€is€to€threatenÌdisconnection€of€nonpayment€of€the€service.€€I€mean,Ìthat's€truly€what€we€get€to,€is€either€pay€your€bill€orÌyou€lose€your€service.€€Well,€I€can't€threaten€that€withÌ900.Ì€€€€€€€€MS.€HARRINGTON:€€That's€why€I'm€asking€if€youÌmight€be€slightly€more€imaginative€in€this€area.€€IÌmean,€that€is,€most€creditors€also€consider€or€resort€toÌsome€sort€of€legal€process.ÌÐ	   	 ì,'2   Ð€€€€€€€€MS.€WILLIAMS:€€I€don't€do€that€on€900€charges.ÌI€send€them€back€to€the€carrier€--€to€the€provider€toÌtake€that€action€themselves.€€So,€I€send€them€back€withÌrecourse€to€that€carrier,€so€that€he€can€collect€thoseÌcharges.Ì€€€€€€€€MS.€HARRINGTON:€€Okay.Ì€€€€€€€€MS.€WILLIAMS:€€If€there€are€not€--€if€there€areÌdeniable€charges€that€aren't€paid,€then€I€pursueÌdisconnection€for€nonpayment€of€charges.€€If€someÌportion€of€that€is€900,€that€900€still€goes€back€to€theÌprovider.€€I€don't€send€that€to€an€outside€collectionÌagency.€€The€providers€usually€want€it€back€as€quick€asÌthey€can€get€it€back€so€they€can€take€their€ownÌcollection€action,€but€we€don't€send€those€off€to€anÌoutside€collection€agency,€only€the€deniable€chargesÌthat€are€there.Ì€€€€€€€€So,€there€is€two€ways€I€could€send€them€back,€anÌadjustment€on€a€live€account€or€a€write-off.€€When€IÌfinally€say€this€customer€is€never€going€to€pay€thisÌwhole€bill,€which€includes€deniable€charges,€I€write€offÌthe€charges,€and€I€send€them€back€for€collection€to€theÌB&C€customer.€€So,€the€60-day€rule€doesn't€--€stillÌdoesn't€--€can't€hold€true€for€what€we€do.€€There€is€noÌother€choice€after€that,€and€my€understanding€of€the€60Ìdays€is€that€you€have€to€give€the€customer€60€days.ÌÐ	   	 ì,'2   ÐFrom€a€LEC€perspective,€we€don't€look€at€it€as€that'sÌall€that€customer€can€have.Ì€€€€€€€€MS.€HARRINGTON:€€All€right,€Joel?Ì€€€€€€€€MR.€DICHTER:€€Thank€you,€Eileen.Ì€€€€€€€€Let€me€see€if€I€can€explain€how€internationalÌchargebacks€have€worked€a€little€differently€than€havingÌ900,€and€they€are€starting€to€more€mirror€900€nowadaysÌthan€they€have€in€the€past.Ì€€€€€€€€With€an€international€call,€it's€a€direct-dialÌcall€generally€where€the€consumer€uses€his€normal€longÌdistance€carrier,€whoever€his€picked€carrier€is€to€makeÌa€call€to€the€overseas€location.€€That€call€is€thenÌbilled€by€their€interexchange€or€long€distance€carrierÌas€part€of€their€costs€and€as€part€of€their€bill€andÌpaid€to€them.€€So,€there€is€--€wasn't€a€separate€billingÌpage€like€on€a€900.€€So,€the€incidence€of€chargebacksÌwouldn't€be€available€to€the€provider€of€the€services.ÌIt€would€be€between€the€long€distance€carriers€and€theÌconsumers.Ì€€€€€€€€The€industry€--€as€we€are€starting€to€work€moreÌand€the€foreign€telephone€companies€have€worked€moreÌwith€the€long€distance€carriers€to€bring€about€changesÌin€that€relationship€to€a€point€now€where€a€number€ofÌcompanies€have€entered€into€arrangements€withÌinternational€long€distance€carriers,€such€as€AT&T,€toÌÐ	   	 ì,'2   Ðpass€back€chargebacks€to€consumers,€and€in€turn€theyÌhave€taken€a€more€liberal€approach€with€their€customersÌin€handling€chargebacks€for€international€long€distanceÌcalls.€€This€is€not€a€real€old€phenomenon,€it's€a€fairlyÌrecent€phenomenon,€and€we€have€seen€in€that€short€timeÌspan€chargeback€levels€in€the€10€to€20€percent€range.Ì€€€€€€€€When€you€talk€about€international,€we€also€--€IÌthink€we€need€to€make€the€distinction€that€there€hasÌbeen€a€change€through€the€Telecommunications€Act€ofÌ1996.€€A€lot€of€international€calls€prior€to€that€timeÌwent€through€a€gateway,€such€as€a€500€area€code,€a€10XXXÌexchange€or€an€800€number€and€then€was€rebilled€throughÌa€tariff€filed€with€the€Commission.Ì€€€€€€€€In€the€Telecommunications€Act€of€1996,€thatÌexemption€for€filing€tariffs€was€removed,€the€gatewaysÌthrough€500€and€10XXX€were€no€longer€permitted€and€haveÌbeen€stopped.€€So,€now€when€we€talk€about€internationalÌwe€are€really€talking€about€just€a€direct-dial€type€ofÌsituation,€and€in€that€situation,€there€are€increasingÌarrangements€of€handling€chargebacks€between€the€longÌdistance€carrier€and€the€foreign€telephone€company.Ì€€€€€€€€MS.€HARRINGTON:€€Mark,€did€you€have€a€question?Ì€€€€€€€€MR.€HERTZENDORF:€€I'm€sorry,€did€you€say€thatÌthe€EXEs€are€--€have€been€negotiating€different€kinds€ofÌarrangements€so€that€they€can€pass€customer€chargebacksÌÐ	   	 ì,'2   Ðto€--€who€is€it?€€Is€it€the€IP€or€the€foreign€telephoneÌcompany?Ì€€€€€€€€MR.€DICHTER:€€It€would€be€the€foreign€telephoneÌcompany.€€As€part€of€the€arrangement,€the€way€theÌcompensation€with€a€foreign€telephone€company€works€isÌthey€receive€a€settlement€rate€as€part€of€an€accountingÌarrangement€where€AT&T€or€MCI€or€whoever€pays€an€amount,Ìa€per-minute€amount,€to€the€foreign€telephone€companyÌfor€terminating€the€call,€for€using€their€facilities€toÌterminate€the€call,€they€pay€them€a€settlement€rate.ÌSo,€what€we€are€talking€about€when€we€are€talking€aboutÌa€chargeback€is€on€that€settlement€rate€paid€to€theÌforeign€telephone€company.Ì€€€€€€€€MR.€HERTZENDORF:€€And€this€is€becoming€a€lotÌmore€common,€and€do€you€know€anything€about€how€oftenÌthese€contracts€are€negotiated€--€renegotiated?Ì€€€€€€€€MR.€DICHTER:€€I€would€say€these€negotiations€areÌconstantly€ongoing,€and€there€has€been€a€lot€of€effortÌby€the€Âé¶¹´«Ã½€Communications€Commission€in€this€areaÌdealing€with€trying€to€reduce€the€accounting€rates€thatÌare€--€go€between€the€foreign€telephone,€foreignÌcountries€and€the€long€distance€carries.€€So,€it's€anÌongoing€process€of€negotiation.Ì€€€€€€€€MS.€HARRINGTON:€€I'm€going€to€ask€us€to€hold€onÌinternational€now.€€That's€sort€of€the€next€issue€thatÌÐ	   	 ì,'2   Ðwe're€going€to€get€to,€and€before€we€hear€from€Don€andÌPeter,€Adam,€do€you€have€a€question?Ì€€€€€€€€MR.€COHN:€€Yes,€a€point€that€was€coming€upÌearlier€with€regard€to€LEC€billing€practices,€I€justÌwanted€to€ask,€do€you€feel€that€it's€a€--€well,€I€wantÌto€hear€from€other€parties,€as€well,€how€they€feel€aboutÌthe€practice€of€LECs€refraining€from€exercising€theÌcreditors'€rights€with€regard€to€the€--€with€the€900Ìnumber€chargebacks€and€whether€that€is€a€reasonableÌpractice€to€send€those€charges€back€after€that€longÌperiod€of€time€instead€of€taking€an€action€that€theyÌwould€with€regard€to€their€own€charges.€€I€wanted€toÌhear€what€the€LECs€had€to€say€about€that€and€also€--Ìactually,€what€the€LEC€--€the€other€LEC€is€not€here€--Ì€€€€€€€€MS.€WILLIAMS:€€The€LEC.Ì€€€€€€€€MR.€COHN:€€--€had€to€say€about€that.Ì€€€€€€€€MS.€HARRINGTON:€€And€I€guess€we€understand€--Ìwith€respect€to€their€own€charges€we€understand€theyÌhave€the€option€to€terminate€service,€but€perhaps€theÌquestion€is€is€it€reasonable€to€refrain€from€exercisingÌother€creditors'€rights€here?€€So,€we€would€like€to€hearÌa€comment€on€that.Ì€€€€€€€€Don,€do€you€have€anything€on€that?€€You're€next,Ìand€we€will€come€back€to€you,€Kim.Ì€€€€€€€€MR.€KLUG:€€I€was€going€to€comment€on€the€part€ofÌÐ	   	 ì,'2   Ðthe€question€about€what€is€the€level€of€chargebacks.Ì€€€€€€€€MS.€HARRINGTON:€€Okay.Ì€€€€€€€€MR.€KLUG:€€I€think€that€it's€a€good€question.ÌIt's€also€a€very€difficult€question.€€It€would€be€likeÌasking€what€the€average€weight€of€the€people€in€the€roomÌwere.€€You€have€some€distribution€over€some€mean,€andÌthe€factors€that€--Ì€€€€€€€€MR.€HERTZENDORF:€€What's€the€mean?Ì€€€€€€€€MR.€KLUG:€€Okay,€I'll€give€you€the€mean,€but€letÌme€give€the€caveats€before€I€give€you€the€mean.€€I€thinkÌthe€level€of€chargebacks€is€a€function€of€three€things.ÌNumber€one,€it's€the€price€per€minute€or€price€of€aÌcall.€€Chargeback€rates€for€a€50€cent€call€are€going€toÌbe€lower€than€chargebacks€for€calls€that€average,€youÌknow,€$30.€€It's€also€a€function€of€the€application.ÌChargeback€rates€for€entertainment-oriented€applicationsÌtend€to€be€higher€than€those€for,€for€example,€pollingÌapplications.Ì€€€€€€€€And€the€last€factor€is€I€think€the€experience€ofÌthe€person€making€the€call.€€Someone€that€has€used€900Ìcalls€repeatedly€as€a€regular€user€will€I€thinkÌunderstand€how€the€--€how€the€system€works€and€how€theyÌcan€get€refunds€easier€than€someone€that€doesn't.Ì€€€€€€€€To€answer€your€question,€Mark,€MCI's€experienceÌis€that€chargebacks€across€the€board€are€in€the,€youÌÐ	   	 ì,'2   Ðknow,€10€to€15€percent€range,€and€because€our€mix€ofÌcustomers€changes€and€our€mix€of€applications€changes,Ìthat's€a€fairly€fluid€number.Ì€€€€€€€€MR.€HERTZENDORF:€€Now,€when€you€say€that,€areÌyou€referring€to€a€broad€definition€or€are€you€justÌtalking€about€incollectibles€or€is€this€a€narrowerÌdefinition€than€people€have€made€the€call€and€neverÌpaid?Ì€€€€€€€€MS.€HARRINGTON:€€Mark,€could€you€use€theÌmicrophone€so€everybody€can€hear€you?Ì€€€€€€€€MR.€HERTZENDORF:€€I'm€just€asking€about€sort€ofÌthe€definition€you're€using€here€with€regard€toÌchargebacks.€€Is€this€--€when€you€say€--€you€are€sayingÌ10€to€15€percent€of€billings€are€uncollectible?Ì€€€€€€€€MR.€KLUG:€€No,€I'm€referring€--€I'm€taking€outÌof€that€bad€debt,€you€know,€customers€that€simply€moveÌor,€you€know,€for€whatever€reason€the€RBOCs€cannot€--Ìcannot€collect€from.€€So,€these€are€calls€that€wereÌmade,€people€acknowledge€the€call€and€have€been€billedÌby€a€LEC€and€get€refunds€for€whatever€reasons.Ì€€€€€€€€MR.€HERTZENDORF:€€Do€you€have€any€idea€what€theÌpercentage€would€be€for€a€much€broader€definition€thatÌwould€be€--€basically€be€percentage€of€--€percentage€ofÌ--Ì€€€€€€€€MR.€R.€GORDON:€€Revenue,€revenue.ÌÐ	   	 ì,'2   Ð€€€€€€€€MR.€HERTZENDORF:€€Okay,€that€will€do€it,€maybeÌthe€revenue€--€the€ratio€of€the€revenue€collected€to€theÌrevenue€you€have€tried€to€bill?Ì€€€€€€€€MR.€KLUG:€€No,€I€have€--€not€offhand.€€I€wouldÌsay€it's€probably€another€3€to€5€percent,€something€inÌthat€range.Ì€€€€€€€€A€couple€other€caveats,€one€is€these€figuresÌdon't€include€applications€for€which€MCI€does€notÌprovide€billing€and€collection€services.€€Those€tend€toÌbe€adult-oriented€applications,€sweepstakes,€games€ofÌchance,€job€lines.€€We€have€several€categories€that€weÌdon't€provide€billing€and€collection€services€for.Ì€€€€€€€€The€other€comment€is€this€pertains€only€to€900Ìcalls,€not€international-dialed€calls€or€other€dialingÌplans,€such€as€800.Ì€€€€€€€€MS.€HARRINGTON:€€Thank€you,€Don.Ì€€€€€€€€Peter€--€I'm€sorry,€Adam,€do€you€have€aÌquestion?Ì€€€€€€€€MR.€COHN:€€I€just€had€a€question€to€follow€up€onÌthose€points,€which€I€thought€were€very€interesting.ÌYou€mentioned€the€three€factors€that€--€that€worked€toÌaffect€a€chargeback€rate,€and€I€was€wondering,€one€ofÌthem€you€mentioned€was€familiarity€of€the€caller€withÌthe€way€the€system€works.€€How€does€that€work?€€DoesÌthat€mean€that€the€more€familiar€a€caller€becomes€with€aÌÐ	   	 ì,'2   Ðsystem,€the€less€likely€there€is€to€be€a€chargeback€orÌmore€likely?Ì€€€€€€€€MR.€KLUG:€€I€think€it's€the€more€likely.€€MoreÌoften€than€not,€when€we€get€a€chargeback€back€from€theÌLEC,€and€last€year€I€think€our€average€looked€like€aboutÌ$62€per€ANI€or€per€subscriber,€that€doesn't€represent€aÌsingle€call.€€That€represents€multiple€calls.€€So,€it'sÌnot€a€case€of€one€person€making€a€900€call€and€askingÌfor€a€refund.€€More€often€than€not,€it's€multipleÌcalls.Ì€€€€€€€€The€other€point,€just€to€emphasize€theÌexperience€of€the€user,€we€found€that€last€year,€1Ìpercent€of€the€people€that€we€gave€refunds€toÌrepresented€21€percent€of€the€total€dollars€that€weÌrefunded.€€So,€it's€very€skewed€in€terms€of,€you€know,Ìpeople€who€get€refunds.Ì€€€€€€€€MR.€COHN:€€Is€that€also€a€factor€of€the€type€ofÌservice€that€--€the€thing€I'm€trying€to€get€at€actuallyÌis,€you€mentioned€two€other€factors,€the€function€of€theÌapplication€was€one€of€them.€€To€what€extent€do€youÌthink€that€the€application€affects€the€chargeback€rateÌalone€and€to€what€extent€does€the€function€--€does€theÌapplication€attract€a€repeat€caller,€thereby€sort€ofÌworking€into€the€other€factor€that€you€mentioned?€€IsÌthere€something€inherent€about€a€product€that's€beingÌÐ	   	 ì,'2   Ðoffered€that€increases€the€rate€of€chargebacks?Ì€€€€€€€€MR.€KLUG:€€Well,€all€of€these€factors€areÌsomewhat€related.€€The€entertainment€applications€thatÌtend€to€have€higher€chargeback€rates€also€tend€to€have€aÌhigher€price€per€call.€€They€tend€to€be,€oh,€anywhereÌfrom€$3€to€$5€a€minute,€and€the€average€end€userÌbilling,€you€know,€can€go€anywhere€from€$25€to€$50,€inÌthat€range,€versus€a€short€holding€time€duration€call,Ìlike€you€might€see€on€NBC€DateLine€or€something,€voteÌwhether€you€think€O.€J.€Was€guilty€or€something,€mightÌbe€50€cents,€a€dollar,€and€people€see€less€--€I€guessÌthere€is€a€utility€associated€with€that,€as€well.Ì€€€€€€€€MS.€HARRINGTON:€€Is€anyone€aware€of€aÌhigher-priced€information€service€not€in€theÌentertainment€category?Ì€€€€€€€€Don?Ì€€€€€€€€MR.€KLUG:€€We€have€some€business-to-businessÌapplications.€€One€of€our€customers€is€a€bank,€and€theyÌuse€900€service€for€their€clients€to€submit€mortgageÌinformation€when€they€are€buying€and€selling€mortgages,Ìand€it's€a€--€it's€a€$50€transaction.Ì€€€€€€€€The€State€of€Ohio€has€a€900€application€forÌtheir€Brady€Gun€Control€Bill.€€They€require€gun€dealersÌto€call€900€numbers€to€determine€if€the€personÌpurchasing€the€gun€has€a€prior€criminal€record,€and€IÌÐ	   	 ì,'2   Ðbelieve€that's€about€a€$35€flat-rate€call.Ì€€€€€€€€MS.€HARRINGTON:€€Do€you€have€any€information€onÌchargebacks€for€those€types€of€accounts?Ì€€€€€€€€MR.€KLUG:€€They€are€--€they€are€pretty€small,ÌI'd€say€single€digit.Ì€€€€€€€€MS.€HARRINGTON:€€Okay.Ì€€€€€€€€Dave?Ì€€€€€€€€MR.€GILLIS:€€As€far€as€the€information€aboutÌchargebacks,€I€guess€--€I€think€it's€important€to€getÌwhat€the€facts€are€as€opposed€to€the€level€ofÌgeneralization€that€we€usually€see€reported€in€theÌpress,€and€to€follow€up€on€that,€I'm€curious€whether€theÌindustry€maintains€statistics€that€would€identifyÌchargebacks€by€type€of€billing€system€that's€used.Ì€€€€€€€€It's€my€understanding€that€there€are€a€varietyÌof€ways€that€people€can€agree€to€pay€for€pay-per-callÌservices,€either€through€subscription€arrangements€orÌother€sorts€of€mechanisms€simply€than€on€a€per-callÌbasis,€and€it€would€be€significant€to€me€if€chargebacksÌassociated€with€presubscription€arrangements€wereÌconsiderably€less€than€those€associated€with€sort€of€theÌother€forms€of€billing€systems.Ì€€€€€€€€The€other€thing€that€would€be€helpful,€I€think,Ìis€to€understand€what€the€information€providersÌthemselves€do€to€follow€up€with€respect€toÌÐ	   	 ì,'2   Ðuncollectibles€and€chargebacks€and€what€efforts€theyÌmake€to€pursue€their€own€creditor€rights€and€what€theirÌexperience€has€been.Ì€€€€€€€€The€third€thing€and€the€point€I'd€like€to€makeÌin€this€area€is€an€inquiry€as€to€what€efforts€have€beenÌmade€by€the€industry€to€identify€at€the€front€end€ofÌthis€transaction€who€are€going€to€be€chargebackÌcandidates.€€Most€businesses€select€who€they€are€goingÌto€offer€their€services€to,€and€most€--€many€businessesÌdecline€to€offer€services€because€they€don't€know€thatÌthey€are€going€to€get€paid€for€those€services.Ì€€€€€€€€I€think€this€industry€is€rather€unique€as€oneÌthat€is€simply€willing€to€offer€its€services€withoutÌundertaking€any€particular€examination€of€who€it'sÌexpecting€payment€from.Ì€€€€€€€€So,€I€think€those€are€sorts€of€issues€thatÌcertainly€as€state€attorneys€general€we€don't€haveÌaccess€to,€and€I€would€expect€that€the€industry€wouldÌhave€access€to€that€sort€of€information€that€wouldÌenable€policy€makers€to€address€in€a€reasonable€way€theÌproblem€of€chargebacks.Ì€€€€€€€€MS.€HARRINGTON:€€I€think€several€of€theÌquestions€you€raised,€Dave,€are€highlighted€in€theÌagenda€for€later€today,€and€I€appreciate€knowing€thatÌthey€are€foremost€on€your€mind,€as€well.ÌÐ	   	 ì,'2   Ð€€€€€€€€The€question€about€data€maintained€by€theÌindustry€I€think€is€an€important€one,€and€this€is€anÌopen€record€in€this€rulemaking,€and€we€would€encourageÌany€of€you€who€have€additional€data€on€the€chargebackÌissue,€by€application€type,€by€collection€method,€toÌsubmit€that€for€the€record.Ì€€€€€€€€Peter,€I€think€you're€next.Ì€€€€€€€€MR.€BRENNAN:€€Thank€you.€€This€is€PeterÌBrennan.Ì€€€€€€€€Tele-Publishing€has€prepared€in€writing€and€inÌdigital€form€some€case€studies,€because€we€felt€that€weÌhad€the€unique€ability€to€do€that.€€Our€services,€whichÌI€mentioned€are€personals€services,€which€in€the€UnitedÌStates€we€offer€to€about€600€newspapers.€€In€order€toÌmake€this€manageable,€I€took€seven€different€newspapersÌfrom€various€parts€of€the€country,€four€major€dailyÌnewspapers,€three€weeklies,€because€there€are€someÌverities€there.€€I€took€four€papers€that€had€experiencedÌa€very€high€level€of€chargebacks€and€three€papers€thatÌexperienced€what€we€consider€an€acceptable€level€ofÌchargebacks.Ì€€€€€€€€Historically,€our€chargebacks€have€run€in€the€4Ìto€5€percent€range.€€Lately€--€and€when€I€say€lately,€IÌmean€in€the€last€six€to€nine€months€--€those€chargebacksÌhave€risen€on€an€overall€basis€to€8€to€9€percent.€€AndÌÐ	   	 ì,'2   Ðthe€reason€for€those,€when€we€look€at€them,€there€areÌspecific€areas,€specific€problems,€specific€clients€thatÌwe€have,€for€example,€The€Tampa€Tribune,€where€theÌchargebacks€are€26€percent€sometimes,€where€theÌchargebacks€in€The€Memphis€Flyer,€which€is€a€weekly,€areÌ12€percent,€and€a€number€of€those.Ì€€€€€€€€And€so€what€I€am€able€to€provide€is€--€is€actualÌdata€right€down€to€the€call€records€from€your€analysis,Ìand€I€will€attempt€to€--€to€also€make€that€--€make€someÌassumptions€and€break€it€down€from€our€point€of€view,Ìbut€I€will€provide€you€with€the€raw€data€for€that.Ì€€€€€€€€MS.€HARRINGTON:€€That's€excellent,€Peter.Ì€€€€€€€€MR.€BRENNAN:€€What€I€wanted€to€say,€though,€asÌone€--€well,€the€other€important€thing€is€we€considerÌchargebacks€--€our€company€considers€chargebacks€moreÌthan€anything€else€a€measure€of€how€well€we€are€doingÌour€job.€€If€people€are€pleased€with€the€service€and€theÌcustomer€is€satisfied,€the€chargebacks€are€generallyÌlow.€€There€are€those€who€abuse,€and€they€--€and€thereÌwill€be.€€To€some€extent,€we€have€looked€at€that€as€aÌcost€of€doing€business,€all€things€being€equal.Ì€€€€€€€€The€other€thing€is€that€we€market€--€because€forÌour€services€we€provide€the€newspapers€in€this€instanceÌwith€camera-ready€artwork,€so€we€have€six€differentÌtracks€going€at€any€one€time.€€Essentially€the€sameÌÐ	   	 ì,'2   Ðmarketing€goes€all€across€the€country€to€any€of€ourÌoutlets.€€So,€we€are€unwilling€to€accept€that€a€consumerÌin€Florida,€for€example,€was€less€willing€to€understandÌthe€obligations€and€the€price€and€less€willing€to€payÌfor€the€service€than€a€consumer€in€New€York€or€aÌconsumer€in€some€other€part€of€the€country.Ì€€€€€€€€So,€we€are€left€with€the€conclusion,€based€onÌthat€and€on€other€factors,€that€the€problem€withÌchargebacks€is€primarily€a€problem€that€the€localÌexchange€carriers€are€too€cavalier€and€too€willing€toÌtreat€chargebacks,€treat€these€issues€on€a€timelyÌbasis.€€We€notice€chargebacks€coming€in€months€andÌmonths€and€months€late.€€We€notice€significant€varianceÌon€a€LEC-by-LEC€basis,€and€with€--€and€we€think€for€thatÌreason€that€--€that€we€need€--€we€need€better€control€ofÌthe€data€base,€which€we€will€talk€about€later,€andÌothers,€and€we€seek€the€Commission's€help€in€thatÌregard.Ì€€€€€€€€MS.€HARRINGTON:€€Thank€you,€Peter.Ì€€€€€€€€Richard?Ì€€€€€€€€MR.€R.€GORDON:€€Yes,€first€and€foremost,€I€wouldÌlike€to€acknowledge€the€testimony€and€the€statementsÌmade€by€Southwestern€Bell,€because€the€clear€admissionÌthat€the€60-day€provision€is€only€a€guideline€in€theirÌperspective€is€I€think€part€of€the€salient€issue€here,ÌÐ	   	 ì,'2   Ðthe€fact€that€90€or€120€days€later,€if€the€consumerÌsays,€I€don't€want€to€pay€for€this,€they€are€still€goingÌto€bring€it€back€to€the€industry€is€based€on€myÌinterpretation€and€a€reading€of€the€Âé¶¹´«Ã½€Register€--Ìand€I€would€like€to€read€the€record€--€a€clearÌmisunderstanding€that€must€be€immediately€corrected.Ì€€€€€€€€I'm€on€page€387€of€the€Âé¶¹´«Ã½€Register€fromÌ1993.€€"Initiation€of€billing€review.€€A€customer€mayÌinitiate€a€billing€review€with€respect€to€a€telephoneÌbilled€purchase€by€providing€the€billing€entity€withÌnotice€of€a€billing€error€--"€important€words€"--€noÌlater€than€60€days€after€the€billing€entity€transmittedÌthe€first€billing€statement€that€contains€a€charge€forÌsuch€telephone-billed€purchase."Ì€€€€€€€€We€happen€to€be€privileged€to€have€Robin€Mahl€inÌthe€audience€here,€and€I€believe€that€if€you€would€like,Ìshe€could€comment€on€Congress'€intent€on€the€60-dayÌrule.€€I€don't€believe€that€it's€Congress'€intent€thatÌthat€be€a€soft€date€that€the€LEC€can€move€at€itsÌdiscretion€to€keep€good€consumer€relations.€€I€believeÌthat€this€is€a€firm,€established€policy€in€the€writtenÌrecord,€and€I€think€it€mirrors€the€intent€of€Congress.Ì€€€€€€€€MS.€HARRINGTON:€€Thank€you,€Richard.Ì€€€€€€€€Albe€and€then€Walt€--€actually,€Mark?Ì€€€€€€€€MR.€HERTZENDORF:€€I€just€have€a€quick€questionÌÐ	   	 ì,'2   Ðfor€Peter€Brennan.€€I€was€just€wondering€with€regard€toÌthe€chargebacks,€are€a€lot€of€your€customers€repeatÌcustomers€that€are€requesting€chargebacks?€€Is€thatÌsomething€you€know€anything€about?Ì€€€€€€€€MR.€BRENNAN:€€We€know€that€customers€--Ìgenerally€our€customers€are€repeat€customers,€notÌusually€on€a€--€on€a€month-after-month-after-monthÌbasis.€€Usually€the€way€--€the€way€personals€work,€theyÌusually€they€find€some€dates€and€then€a€few€months€laterÌthey€are€back€again.€€So,€we€do€have€repeat€customers.Ì€€€€€€€€There€is€a€higher€--€and€I€can€--€I€will€provideÌyou€with€the€actual€statistics€about€this€when€I€canÌcheck,€but€there€is€a€higher€incidence€of€repeatÌcustomers€for€chargebacks.€€Chargebacks€generally€--€forÌexample,€I€have€--€I€have€a€report€of€the€same€userÌcharging€back€the€same€amount€for€three€consecutiveÌmonths,€which€is€--€which€is€rather€astounding,€on€anÌanecdotal€basis,€but€I€will€need€to€do€a€little€moreÌresearch€before€I€can€--Ì€€€€€€€€MS.€HARRINGTON:€€Actually,€I€overlooked€Jon€inÌthe€order€of€people€who€would€be€called€on,€so€Jon,Ìlet's€hear€from€you,€and€particularly,€there€is€aÌquestion€here€about€what€measures€carriers€and€providersÌcould€take€to€reduce€the€level€of€chargebacks,€and€I€--Ìif€we€could€get€some€discussion€on€that€question,€asÌÐ	   	 ì,'2   Ðwell,€it€would€be€helpful.Ì€€€€€€€€Jon?Ì€€€€€€€€MR.€SHAUB:€€I€was€just€going€to€share€someÌinformation,€and€again,€with€caveats,€this€is€notÌmathematical€precision€and€very€much€the€same€caveatsÌthat€MCI€mentioned.Ì€€€€€€€€Our€experience€with€chargebacks€from€variousÌbilling€channels,€primarily€various€LECs,€does€vary€byÌseveral€percentage€points€LEC€to€LEC,€is€generally€a€fewÌpercentage€points€--€I€would€characterize€in€the€20Ìpercent€range.€€That€applies€to€900€services€where€AT&TÌis€the€billing€entity€but€does€include€the€bad€debt€typeÌwrite-off€with€all€detail€when€handled€properly.€€So,€aÌslight€difference€in€percentage,€to€some€degree€anÌinclusion€that€was€not€in€Don's€data.Ì€€€€€€€€MS.€HARRINGTON:€€Thank€you,€Jon.Ì€€€€€€€€All€right,€Albe,€Walt€and€Kim,€in€that€order,Ìplease.Ì€€€€€€€€MR.€ANGEL:€€I€will€try€to€pick€up€some€looseÌends€in€terms€of€points€of€fact€that€have€been€requestedÌhere.Ì€€€€€€€€In€terms€of€industry€statistical€information,Ìthe€ISA€did€conduct€a€bit€of€market€research,€and€weÌhave€I€believe€appended€to€that€our€comments.€€What€itÌhelps€to€show€is€the€order€of€priority€in€terms€of€theÌÐ	   	 ì,'2   Ðchargebacks,€and€just€to€recount€that,€we€see€that€adultÌservices€and€psychic€services€are€up€towards€the€top€ofÌhigh€chargeback€ratios,€that€other€entertainmentÌservices€follow€that.€€Then€we€get€into€areas€of€voiceÌpersonals€and€at€the€bottom€would€be€applications€likeÌpolling€and€pure€information.Ì€€€€€€€€Now,€don't€read€too€much€into€various€factorsÌthat€have€been€identified€here,€because€although€priceÌis€a€determination,€you€really€have€to€look€to€theÌapplication.€€There€was€a€specific€question€as€toÌservices€that€are€high€priced€that€have€lowÌchargebacks.€€A€couple€that€are€worthy€of€considerationÌare€the€FCC€auction€line€where€industrial€players€areÌessentially€bidding€on€Spectrum€and€had€to€remain€on€theÌphone€for€a€long€time,€incur€very€large€charges,€theÌchargeback€ratios€are€very€low.Ì€€€€€€€€MR.€HERTZENDORF:€€The€FCC€auction?Ì€€€€€€€€MR.€ANGEL:€€Yeah.€€In€effect,€what€happened€wasÌFCC€was€conducting€an€auction€for€Spectrum.Ì€€€€€€€€MR.€HERTZENDORF:€€Oh,€okay.Ì€€€€€€€€MR.€ANGEL:€€And€people€could€participate€in€thatÌauction€by€monitoring€a€900€call.€€Our€company€providesÌservices€to€handicappers,€and€some€of€those€servicesÌmight€be€$50,€$75€a€call,€traditionally€very€lowÌchargebacks,€because€the€people€who€are€calling€perceiveÌÐ	   	 ì,'2   Ðvalue€and€don't€challenge€the€number.€€So,€you€have€onÌthe€other€end€of€the€spectrum€high-priced€services€thatÌare€low€chargebacks.Ì€€€€€€€€But€the€most€salient€point€that€I€want€to€makeÌis€that€the€industry€is€united€in€the€belief€thatÌchargebacks€as€a€whole€have€increased€significantly€overÌthe€last€two€years,€that€if€you€look€at€the€mean,€you'reÌgoing€to€see€it€creeping€up€for€every€category€and€thatÌthe€only€way€that€we€can€explain€that€is€to€say€thatÌthere€are€structural€factors€at€work.€€It's€not€theÌapplications€but€the€way€in€which€the€billing€insertÌadvisory€causes€consumers€to€essentially€question€andÌwithhold€payment,€the€way€in€which€the€local€exchangeÌcarriers€implement€their€billing€procedures,€and€what€weÌreally€want€here€is€a€way€of€tightening€up€thoseÌprocedures€in€order€that€we€can€regain€efficiency.Ì€€€€€€€€The€--Ì€€€€€€€€MS.€HARRINGTON:€€Albe,€do€you€mean€those€twoÌitems€in€the€order€that€you€listed€them?€€That€is€--Ì€€€€€€€€MR.€ANGEL:€€That's€a€very€broad€question,€I'llÌanswer€it.Ì€€€€€€€€The€billing€insert€is€really€the€first€line€ofÌdefense,€and€anyone€who's€going€to€question€a€charge€isÌgoing€to€look€to€that€first€to€determine€what€the€rulesÌof€the€road€are.ÌÐ	   	 ì,'2   Ð€€€€€€€€Now,€there€is€probably€going€to€be€some€veryÌspirited€debate€on€whether€the€local€exchange€carriersÌshould€accept,€you€know,€a€request€for€removal€ofÌcharges€after€60€days,€but€at€least€if€the€advisory€saidÌyou€must€bring€these€to€the€attention€of€the€localÌexchange€carrier€within€60€days,€the€vast€majority€ofÌconsumers€are€going€to€be€responsive€to€that€60-dayÌperiod,€irrespective€of€what€the€actual€treatment€isÌsubsequently.€€So,€you€know,€that's€a€really€importantÌsign€post€to€give€the€right€signal€as€to€timeliness.Ì€€€€€€€€Now,€on€the€issue€of€the€practices,€you€know,Ìthe€industry€has€been€groping€here€trying€to€pullÌtogether€information€that€would€show€the€experience€on€aÌLEC-by-LEC€basis.€€We€are€not€looking€to€point€fingersÌas€much€as€identify€practices€that€are€working€andÌidentify€parties€that€are€not€adhering€to€reasonableÌpractices,€and€we're€hoping€that€this€is€a€vehicle€forÌbringing€these€things€in€focus.Ì€€€€€€€€MS.€HARRINGTON:€€Okay,€quick€question,€Mark?Ì€€€€€€€€MR.€ANGEL:€€The€industry€average,€if€I€had€toÌsay€what€the€industry€average€is,€I€think€it's,€youÌknow,€15€to€20€percent€is€a€realistic€number€in€the€900Ìindustry.€€If€you€look€to€the€non-900€forms€of€access,Ìwhich€are€typically€billed€through€clearinghouses€butÌadministered€by€local€exchange€carriers,€the€rates€areÌÐ	   	 ì,'2   Ðhigher,€probably€25€to€35€percent,€and€it€would€still€beÌin€the€same€order€that€we've€previously€published.Ì€€€€€€€€MS.€HARRINGTON:€€Quick€question?Ì€€€€€€€€MR.€HERTZENDORF:€€Is€Southwest€Bell€going€to€goÌnext€or€is€someone€ahead€of€them?Ì€€€€€€€€MS.€HARRINGTON:€€Walt€and€then€Southwest€Bell.Ì€€€€€€€€MR.€HERTZENDORF:€€Let€me€go€in€between€them,Ìthen.Ì€€€€€€€€MS.€HARRINGTON:€€Okay,€Walt?Ì€€€€€€€€MR.€STEIMEL:€€I€would€like€to€concur€with€theÌlast€gentleman's€remarks,€that€in€our€experience,€toÌsome€degree,€there€has€been€a€lot€of€interpretation€ofÌpolicy€that€the€LECs€are€completely€different€dependingÌon€who€you€are€talking€to,€but€essentially€the€LEC'sÌpolicy€encourages€chargebacks,€and€a€lot€of€consumersÌlook€at€their€bill€and€say€this€is€basically€a€freeÌservice.€€I€can€basically€say€I€am€not€going€to€pay€it,Ìthe€LEC€charges€back,€and€that's€it,€and€while€weÌbelieve€that€the€provider€should€absorb€that€risk,€andÌPilgrim€certainly€when€it€sends€a€bill€out€and€it€gets€aÌchargeback,€it€absorbs€the€risks€of€those€chargebacks,Ìthe€mechanism€it€seems€like€right€now€encouragesÌconsumers€to€charge€back€even€when€we€have€had€evidenceÌof€fraud.Ì€€€€€€€€We€have€had€difficulty€getting€the€LECs€to€goÌÐ	   	 ì,'2   Ðalong€with€this€and€continuing€to€sustain€billings€whenÌwe€can€demonstrate€fraud€exists.€€In€the€most€extremeÌinstances,€we€had€a€district€manager€at€one€of€the€LECsÌthat€was€actively€engaged€in€a€fraud.€€We€eventuallyÌturned€him€in€to€the€Pennsylvania€police,€he€wasÌarrested€and€convicted€for€stealing€service.€€I€believeÌhe€was€convicted.€€I€know€he€was€arrested€and€there€wasÌa€trial.Ì€€€€€€€€And€in€the€other€instance,€we€have€a€number€ofÌinstances€in€which€customers€will€change€their€phoneÌnumbers€or€engage€in€other€dialing€platforms€to€get€backÌto€an€information€service€to€evade€blocks.€€I€mean,€thisÌis€not€uniform,€and€there€is€certainly€many€instances€inÌwhich€consumers€have€legitimate€chargeback€requests,€butÌit€seems€that€right€now€the€system€may€be€a€littleÌbiased€to€encourage€chargebacks.Ì€€€€€€€€One€question€I€had€for€everyone€generally€isÌwhether€or€not€presubscriptions€are€actually€used€inÌconjunction€with€LEC€billing€anymore.€€It€has€been€ourÌexperience€that€LECs€do€not€bill€for€writtenÌpresubscription€agreements,€so€that's€kind€of€aÌnullity.€€Those€two€together€are€kind€of€a€nullity.Ì€€€€€€€€Finally,€as€far€as€measures€to€lower€the€levelÌof€chargebacks,€if€--€we€believe€that€if€900€numberÌblocking€were€made€available€to€all€of€the€interexchangeÌÐ	   	 ì,'2   Ðcarriers€and€all€the€information€providers€and€the€FTCÌand€FCC€could€require€the€use,€could€require€the€pollingÌof€900€number€blocks,€as€well€as€LIDB,€that€would€helpÌlower€chargeback€rates€substantially.€€It€would€make€itÌmuch€easier€to€identify€people€that€more€than€likelyÌwould€charge€back€from€going€to€any€kind€of€informationÌservice€platform.Ì€€€€€€€€MS.€HARRINGTON:€€You€are€talking€about€blockingÌgoing€the€other€way?Ì€€€€€€€€MR.€STEIMEL:€€Right,€well,€just€making€thatÌinformation€available,€because€right€now€it's€impossibleÌto€know€if€someone€has€a€900€number€block.Ì€€€€€€€€MS.€HARRINGTON:€€Right.Ì€€€€€€€€MR.€STEIMEL:€€The€only€way€you€can€know€is€if€aÌcall€is€coming€from€the€customer€through€the€CO€and€itÌblocks€in€the€switch,€but€there€is€no€way€for€anyone€toÌlook€down€at€the€switch€and€see€if€there€is€a€900€numberÌblock,€and€sometimes€there€are€defects€in€the€system€andÌit€lets€calls€go€through.€€Technologically,€there€are€aÌnumber€of€things€that€can€go€wrong.Ì€€€€€€€€We€think€the€system€would€work€much€better€ifÌinterexchange€carriers€and€service€providers€were€ableÌto€look€down€and€see€a€900€block€just€like€we€could€lookÌacross€and€see€in€LIDB€a€collect-calling€block€or€aÌthird-number-billing€block€or€get€information€that€--ÌÐ	   	 ì,'2   Ðinformation€data.€€There€is€a€lot€of€information€we€canÌget,€but€we€cannot€get€900€blocking€information.Ì€€€€€€€€MS.€HARRINGTON:€€We€have€got€a€question€fromÌAllen€and€then€one€from€Marianne,€and€I€will€get€back€toÌyou,€don't€worry,€Mark.Ì€€€€€€€€MR.€HILE:€€My€question€is€for€you,€Albe.€€YouÌsaid€there€are€two€different€levels€of€chargebacks,€andÌI€--€one€is€15€to€20€percent€and€the€other€is€25€to€35Ìfor€calls€that€go€through€clearinghouses?Ì€€€€€€€€MR.€ANGEL:€€Yeah,€let€--Ì€€€€€€€€MR.€HILE:€€What€accounts€for€the€higher€numberÌin€the€latter?Ì€€€€€€€€MR.€ANGEL:€€You€have€heard€the€carriers€identifyÌthose€services€that€they€will€bill€for€and€those€thatÌthey€will€not€bill€for,€and€the€carriers€that€I'mÌreferring€specifically€to€are€AT&T€and€MCI,€which€haveÌthe€lion's€share€of€900€numbers€that€are€used€for€pureÌinformation,€voice€personals€and€psychic€lines,€forÌexample.Ì€€€€€€€€At€the€same€time,€there€are€clearinghouses,Ìthird-party€billers,€that€aggregate€billing€andÌcollection€agreements€with€local€exchange€carriers.ÌIntegretel,€OAN,€ITA€are€some€believers€in€thatÌindustry.Ì€€€€€€€€Now,€if€someone€wants€to€subscribe€to€a€900ÌÐ	   	 ì,'2   Ðservice€from€a€carrier,€the€carriers€are€obligated€toÌprovide€that€900€service,€but€if€it's€an€area,€such€asÌadult€services,€they€typically€will€not€provide€billing,Ìand€the€person€who€is€providing€the€adult€900€serviceÌwill€turn€to€a€third-party€biller€who€has€all€theseÌbilling€and€collection€agreements€in€place,€and€theÌexperience€that€they€are€seeing€is€that€their€chargebackÌratio€is€higher€than€that€of€the€carriers,€and€it's,€youÌknow,€in€some€instances€can€be€as€high€as€50€percent,Ìand€that's€a€function€of€the€application,€it's€aÌfunction€of€the€service,€it's€a€function€of€the€LECÌbillings€and€collections€practices,€and€it€may€be€aÌfunction€of€the€consumer,€who€is€very€familiar€with€allÌof€the€above€and€chooses€to€consume€the€services€with€noÌintention€of€paying€for€them.Ì€€€€€€€€MR.€HILE:€€Okay.Ì€€€€€€€€MS.€HARRINGTON:€€Marianne,€then€Mark,€then€Kim.Ì€€€€€€€€MS.€SCHWANKE:€€I€have€a€question€for€Kim.€€ToÌfollow€up€on€what€Walt€said€about€the€900€blockingÌinformation,€can€you€address€what€the€reasons€are€whyÌthe€900€blocking€information€isn't€currently€availableÌand€are€there€ways€that€it€could€be€made€available€inÌthe€future?Ì€€€€€€€€MS.€WILLIAMS:€€Yes,€I€think€this€has€beenÌsomething€that€a€lot€of€people€have€asked€for€over€theÌÐ	   	 ì,'2   Ðyears.€€Number€one,€I€think€to€just€give€a€wholesaleÌlist€of€customers€who€are€900€blocked€is€a€concern€fromÌa€privacy€perspective,€a€CPNI€issue.€€So,€we€have€alwaysÌbeen€against€just€making€a€list€available€of€everyÌcustomer€who€has€900€blocking.€€That's€not€to€say€that€IÌdon't€think€it€couldn't€be€provided€on€LIDB.€€I€mean,ÌLIDB€does€have€information€on€other€types€of€blocking.Ì€€€€€€€€However,€LIDB€is€an€operator€services€callÌverification€system,€which€900€--€you€know,€900€blockingÌis€not€an€operator-handled€call.€€It's€a€direct-dialedÌcall€that€can't€be€made€or€shouldn't€be€able€to€be€madeÌif€the€customer€has€900€blocking.€€So,€it's€customers€orÌcarriers€who€are€providing€services€on€platforms€otherÌthan€900€who€I€think€want€the€900€blocking€lists€so€thatÌthey€can€block€their€customers€when€a€customer€hasÌchosen€900€blocking.Ì€€€€€€€€MS.€HARRINGTON:€€Time.€€Is€that€a€safeÌassumption?€€Is€it€--Ì€€€€€€€€MR.€ANGEL:€€No.Ì€€€€€€€€MS.€HARRINGTON:€€Is€it€customers€who€want€to€useÌthis€information€for€different€platforms?€€Okay,€so€weÌjust€--€just€to€clarify€for€the€record,€there€is€someÌdispute€among€the€participants€about€that€assumption.Ì€€€€€€€€MS.€WILLIAMS:€€Okay,€well€--€and€I€guess€myÌquestion€to€those€people€would€be€if€the€customer€hasÌÐ	   	 ì,'2   Ð900€blocking€and€can't€make€a€900€call,€that€stops€theÌproblem€right€there.€€I€don't€--€I€don't€know€why€a€900Ìprovider€needs€to€know€that€that€customer€isÌ900-blocked.€€The€call€is€stopped€at€the€switch.Ì€€€€€€€€MR.€HERTZENDORF:€€Perhaps€I€misunderstood,€but€IÌwas€--€from€the€comments€I€got€the€impression€it€wasÌthat€they€wanted€to€use€the€900€number€blocking€to€maybeÌblock€international€calls€or€other€dialing€prefixes.€€IsÌthat€correct?Ì€€€€€€€€MS.€HARRINGTON:€€Well,€let€me€go€to€the€peopleÌwho€are€saying€no.€€Albe€--Ì€€€€€€€€MR.€HERTZENDORF:€€But€that€wasn't€my€wholeÌquestion,€and€maybe€I€should€go€on€with€the€otherÌquestion€before€it€gets€--Ì€€€€€€€€MS.€HARRINGTON:€€No,€just€a€minute,€Mark,€and€weÌwill€get€back€to€you.Ì€€€€€€€€Albe,€would€you€quickly€say€what€need€--€wouldÌyou€respond€to€Kim's€question,€please.Ì€€€€€€€€MR.€ANGEL:€€The€point€I€would€like€to€make€isÌthis:€€That€the€people€that€are€in€the€business€ofÌbilling€for€--€whether€it's€information€services€orÌoperator€services€are€typically€the€same€people.€€TheÌthird-party€billers,€the€clearinghouses€--€the€billingÌclearinghouses€already€have€access€to€line€data€bases€inÌconnection€with€operator€services,€but€they€may€want€toÌÐ	   	 ì,'2   Ðhave€access€to€those€same€data€bases€vis-a-visÌinformation€service€calls,€and€there's€no€reason€thatÌthese€billing€entities€shouldn't€be€provided€thatÌinformation.Ì€€€€€€€€MS.€HARRINGTON:€€That's€not€an€answer€to€theÌquestion.€€The€question€is€what€use€could€a€billingÌentity€make€of€information€about€who's€got€900€numberÌblocking€if€people€can't€make€900€number€calls,€they€areÌblocked.€€What€do€you€need€that€information€for?Ì€€€€€€€€MR.€ANGEL:€€Okay,€the€example€that€I€would€giveÌis€of€a€service€provider€who€offers€its€service€via€800Ìaccess€arrangement€and€intends€to€bill€either€to€aÌcredit€card€or€through€the€telephone€invoice€and€wantsÌto€have€a€further€indicator€as€to€whether€that€householdÌhas€chosen€900€blocking€as€a€factor€to€consider€whetherÌor€not€they€are€going€to€offer€service.Ì€€€€€€€€MS.€HARRINGTON:€€What€about€the€privacy€interestÌthat€the€consumer€has€that€Kim€talks€about?€€What's€yourÌanswer€to€that?Ì€€€€€€€€MR.€ANGEL:€€Okay,€the€privacy€issue€is€easilyÌaddressed.€€The€providers€of€the€service€are€not€goingÌto€be€breaching€any€consumers'€right€to€privacy,€nor€areÌthey€going€to€be€making€information€available€to€theÌpublic€or€to€others€that€would€compromise€thatÌconsumer's€privacy.€€The€wall€of€defense€that's€been€putÌÐ	   	 ì,'2   Ðup€here€by€the€local€exchange€carriers€and€to€a€certainÌextent€the€carriers€is€based€on€suspicion€and€concernÌrather€than€facts.€€They€are€concerned€that€consumersÌare€going€to€be€compromised.€€At€the€same€time,€theÌproviders€of€service€are€fully€well€aware€of€what€theÌprivacy€standards€are€and€will€use€the€information€inÌorder€to€limit€abuse.Ì€€€€€€€€MS.€HARRINGTON:€€Well,€let€me€just€flip€that€andÌsay€as€a€consumer€who€chooses€900€number€blocking,€thatÌchoice€is€not€made€with€the€intent€that€the€informationÌwould€be€used€to€limit€choice.Ì€€€€€€€€MR.€ANGEL:€€I'm€sorry,€say€it€again.Ì€€€€€€€€MS.€HARRINGTON:€€I€am€saying€if€I€make€a€choiceÌas€a€consumer€to€have€900€number€blocking€on€my€phone,ÌI'm€not€intending€that€that€will€be€further€used€toÌlimit€my€choice€when€I€go€into€the€marketplace€to€obtainÌadditional€services.Ì€€€€€€€€MR.€ANGEL:€€That's€a€legitimate€point.€€YouÌknow,€the€problem€is€with€the€extent€of€the€data€base,Ìall€right?€€Let's€say€you're€a€hospital€and€you'veÌdirected€your€telecommunications€manager€to€instituteÌevery€known€block€in€order€to€avoid€charges€back€to€yourÌlines.€€So,€you€institute€this€900€block,€and€all€of€aÌsudden€you€see€800€access€calls€being€billed€to€yourÌaccount,€and€you€inquire,€what€can€I€do€to€stop€theseÌÐ	   	 ì,'2   Ðcalls?Ì€€€€€€€€Well,€that's€part€of€why€we're€here,€and€anÌentity€that€might€be€billing€to€such€an€entity€wouldÌwant€to€know,€oh,€well,€this€is€a€hospital.€€I€wish€IÌhad€some€data€base€that€would€enable€me€to€know€thatÌthat's€a€hospital€before€I€billed€to€that€hospital.Ì€€€€€€€€MS.€WILLIAMS:€€Eileen,€can€I€interject?€€If€theyÌhad€a€valid€presubscription€agreement€with€the€validÌbilling€party,€that€call€would€never€go€through,€andÌthat's€been€my€one€point.€€I€don't€say€giving€out€900Ìinformation€is€bad€as€far€as€on€LIDB€goes,€but€if€youÌhad€a€valid€presubscription€arrangement,€if€your€serviceÌwas€really€provided€over€900,€where€it€should€be,€itÌwouldn't€be€a€problem.Ì€€€€€€€€MS.€HARRINGTON:€€Okay,€Mark?Ì€€€€€€€€MR.€HERTZENDORF:€€Yes,€okay.€€There's€been€a€lotÌof€complaints€about€the€LECs'€billing€practices,€and€I'mÌjust€sort€of€wondering,€how€are€these€determined?€€AreÌthey€unilaterally€determined€by€each€LEC€or€are€they€theÌresult€of€contract€negotiations,€and€which€parties€areÌwe€dealing€with?€€I€would€like€to€hear€a€little€bit€moreÌabout€these€billing€and€collection€--€what€is€it€--Ìbilling€and€collection€--Ì€€€€€€€€MS.€WILLIAMS:€€Contracts,€right.€€I€can€addressÌour€contracts,€but€I€didn't€want€to€--€are€there€otherÌÐ	   	 ì,'2   Ðcomments€on€the€900?Ì€€€€€€€€MS.€HARRINGTON:€€Let's€keep€Mark's€question€inÌmind,€and€we€have€got€some€people€waiting€to€answerÌearlier€questions,€I€think.Ì€€€€€€€€MS.€WILLIAMS:€€That's€what€I€was€wondering,€ifÌthey€were€getting€at€the€900€blocking.Ì€€€€€€€€MS.€HARRINGTON:€€We€are€going€to€come€back€toÌyou€on€that,€Kim,€but€Don,€can€we€hear€from€you,Ìplease?Ì€€€€€€€€MR.€KLUG:€€I€just€wanted€to€make€a€comment€onÌKim's€statement€about€concerns€about€privacy€making€900Ìblock€information€available€to€the€industry.€€I€thinkÌthere€is€an€analogy€here€with€the€Direct€MailÌAssociation€in€terms€of€blocks.€€I'm€either€receivingÌjunk€mail€or€receiving€unsolicited€phone€calls,€which€IÌhappen€to€get€a€lot€of,€and€I€think€the€whole€premise€ofÌthat€system€is€that€that€information€is€shared€amongÌpeople€in€the€industry€so€they€can€take€advantage€ofÌit.Ì€€€€€€€€If€900€blocks€are€made€available€to€theÌinformation€providers,€I€think€they€could€use€thatÌinformation€in€terms€of€marketing,€looking€at€certainÌareas€that€perhaps€had€a€high€incidence€of€blocking.ÌYou€mentioned€a€30€percent€in€Southwest€Bell€territory.ÌIt€may€be€higher€in€other€particular€geographic€areas,ÌÐ	   	 ì,'2   Ðand€information€providers€could€take€advantage€of€thatÌto€tailor€their€programs,€to€not€market€to€people€whoÌdidn't€want€to€take€advantage€of€the€service.Ì€€€€€€€€I€think€the€other€thing€that's€worth€mentioningÌis€there€could€be€a€consent€with€that€block€and€askingÌconsumers€if€that€could€be€shared€with€people.Ì€€€€€€€€MS.€HARRINGTON:€€And€Jill?Ì€€€€€€€€MS.€SANDFORD:€€Yes,€hi,€Jill€Sandford€from€theÌNew€York€attorney€general's€Office.Ì€€€€€€€€On€this€issue€of€blocking,€one€thing€that€comesÌto€mind€is€an€issue€of€phantom€billing€of€900€numberÌcalls,€and€it€appears€though€a€consumer€can€block€anÌactual€call€at€the€LEC€level,€is€there€any€blocking€fromÌa€900€number€call€appearing€on€a€consumer's€phone€ball?ÌBecause€we€receive€complaints€from€consumers€who€sayÌI've€done€everything,€I€put€the€block€on€my€call,€butÌyet€I'm€still€being€billed.Ì€€€€€€€€MS.€HARRINGTON:€€Jill,€we€have€got€a€sectionÌthis€afternoon€that's€going€to€cover€that€issue,€ifÌthat's€your€--€your€question€now.€€Could€--Ì€€€€€€€€MS.€SANDFORD:€€It€is.Ì€€€€€€€€MS.€HARRINGTON:€€Could€we€defer€that€for€thisÌafternoon?Ì€€€€€€€€MS.€SANDFORD:€€Sure.Ì€€€€€€€€MS.€HARRINGTON:€€Thank€you,€but€we€will€beÌÐ	   	 ì,'2   Ðdiscussing€that.Ì€€€€€€€€Richard?Ì€€€€€€€€MR.€R.€GORDON:€€Yes,€I€would€like€to€go€back€toÌone€of€the€opening€comments€here,€which€I€think€isÌexactly€on€point,€and€that's€from€the€attorney€general'sÌoffice€that€Dave€made.Ì€€€€€€€€You€suggested€that€it€was€important€that€theÌindustry€know€its€customer,€and€I€believe€that€that€isÌdead€on,€and€what€we're€talking€about€here€is€the€factÌthat€there€is€a€tremendous€amount€of€informationÌavailable€to€the€LECs€and€to€the€phone€companies€whoÌextend€credit€to€consumers,€and€because€they€extendÌcredit,€they€are€doing€so€based€on€the€information€thatÌthey€have,€and€when€the€consumer€says,€I€don't€want€toÌpay€the€bill,€they€have€a€right,€under€both€state€andÌfederal€law,€to€collect€on€that€debt.€€This€is€aÌcommercial€transaction.Ì€€€€€€€€What€we€have€here€is€a€problem€where€the€LECsÌare€not€downstreaming€sufficient€information€--€and€IÌagree€with€you€100€percent€on€the€--€there€has€to€be€aÌprotection€of€privacy,€but€as€an€example,€is€it€anÌinvasion€of€privacy€to€tell€someone€who's€going€to€sellÌsomething€on€the€telephone€in€an€instant€response€modeÌwhere€they€can't€check€to€see€anything€more€about€theÌcustomer€how€long€have€they€had€that€phone€number?ÌÐ	   	 ì,'2   Ð€€€€€€€€Is€it€an€invasion€of€privacy€to€put€a€dataÌpacket€in€the€record€that€says€this€phone€went€intoÌservice€yesterday€or€this€phone€has€been€in€service€forÌthree€years,€because€when€you€talk€about€knowing€yourÌcustomer,€which€we€again€support€and€encourage,€if€weÌknow€this€phone€number€has€been€around€as€an€industryÌfor€three€or€four€years,€we're€going€to€give€a€muchÌhigher€rating€in€our€realtime€risk€management€systems,Ìbecause€it€hasn't€been€turned€off.Ì€€€€€€€€One€of€the€problems€that€we€have€is€thatÌconsumers€know€what's€going€on.€€The€phrase€that€I€likeÌto€say€is€the€educated€consumer€is€our€most€dangerousÌenemy,€because€they€will€go€and€run€up€$500,€$1,000,Ì$2,000€worth€of€charges€and€then€call€the€phone€companyÌand€say,€I'm€getting€a€lot€of€annoying€phone€calls.€€TheÌattorney€generals€say€if€you€get€annoying€phone€calls,Ìyou€have€to€change€my€phone€number,€and€guess€what,€weÌget€the€chance€to€let€them€steal€thousands€and€thousandsÌof€dollars€of€services€again.Ì€€€€€€€€MS.€HARRINGTON:€€Richard,€let€me€make€anÌobservation,€that€if€you€analogize€what€the€providersÌare€doing€here€as€extending€credit€to€the€consumer€forÌinstantaneous€purchase€and€then€state€a€wish€to€haveÌadequate€information€that€may€be€available€out€thereÌconsolidated€so€that€the€providers€who€are€makingÌÐ	   	 ì,'2   Ðdecisions€or€who€are€extending€credit€can€make€informedÌdecisions€essentially€about€the€creditworthiness€of€theÌcaller,€I€would€just€point€to€the€very€careful€regimenÌof€regulation€that€exists€in€connection€with€the€use€ofÌconsumer€payment€information€and€other€relatedÌinformation€in€making€determinations€aboutÌcreditworthiness€under€the€Fair€Credit€Reporting€Act.Ì€€€€€€€€And€so€if€you€are€suggesting€that€thisÌinformation€about€who€has€blocking€service€might€be€inÌsome€measure€a€proxy€for€whether€a€consumer€ought€to€beÌdeemed€creditworthy€to€participate€in€this€kind€ofÌinstantaneous€grant€of€credit€and€purchase€situation,Ìthen€I'd€like€to€hear€you€all€address€the€question€ofÌwhat€kinds€of€protections€ought€to€exist€in€terms€ofÌnotice€to€the€consumer,€opportunity€for€the€consumer€toÌreview€the€record€that€the€credit€grantor€has€availableÌto€it€in€making€its€determinations€of€creditworthiness;Ìnotice€where€a€decision€has€been€made€not€to€provideÌaccess€to€the€consumer€to€that€system€of€credit€in€theÌform€of€referring€them€to€the€source€of€information;€andÌopportunity€for€the€consumer€to€correct€incorrectÌinformation€in€those€data€bases.Ì€€€€€€€€I€think€that's€--€I€think€from€our€standpoint,Ìif€you€are€going€to€come€at€this€that€way,€then€it€wouldÌbe€very€difficult€for€the€FTC€staff€to€distinguishÌÐ	   	 ì,'2   Ðbetween€this€situation€and€the€more€conventional€creditÌsituation€and€the€protections€that€consumers€receive.Ì€€€€€€€€MR.€R.€GORDON:€€The€answer€is€in€hand,€Eileen,Ìbecause€what€we€are€talking€about€is€we€are€talkingÌabout€immediate€and€instantaneous€access€versus€divertedÌaccess.€€In€other€words,€if€we€see€an€ANI€coming€inÌthat's€three€days€old€and€it's€the€fifth€call€in€theÌlast€hour€to€this€particular€information€provider€fromÌthat€ANI,€we€are€not€saying€deny€the€customer€service.ÌWe€are€saying€the€software€is€sophisticated€enough€toÌthen€interrupt€that€call,€put€a€live€customer€serviceÌperson€on,€and€ask€the€consumer,€are€you€aware€of€theÌfact€that€you€have€made€five€calls€in€the€last€one€hour,Ìand€get€a€recording€of€their€voice.€€This€is€all€doneÌrealtime.Ì€€€€€€€€These€are€the€types€of€things€that€the€industryÌis€doing€to€proactively€prevent€the€denial€of€credit€butÌalso€to€restrict€access€to€people€that€when€you€say€didÌyou€know€you€have€made€five€calls,€you€don't€hear€aÌresponse,€you€hear€a€click.€€The€problem€is€that€unlessÌwe€have€this€data€available,€it€becomes€aÌself-fulfilling€prophecy.Ì€€€€€€€€Don€made€a€very€excellent€point€about€theÌchargeback€rates€being€higher€as€a€result€of€the€cost€ofÌthe€call€being€higher.€€This€has€become€aÌÐ	   	 ì,'2   Ðself-fulfilling€prophecy.€€If€chargebacks€are€30€to€40Ìpercent,€those€costs€have€to€be€borne€back€by€theÌconsumers€who€are€actually€paying€for€these€services.ÌSo,€rates€of€$2€a€minute,€which€were€commonplace€in€theÌentertainment€industry€three€years€ago,€now,€by€default,Ìare€$3.50€to€$4€a€minute,€because€the€chargebacks€are€soÌhigh.Ì€€€€€€€€So,€consequently,€what€happens€is€the€propensityÌto€charge€back€increases,€because€the€dollar€value€ofÌthe€call€increases€so€dramatically.€€Again,€I€want€to€goÌback€and€compliment€the€attorney€generals€forÌrecognizing€how€important€it€is€that€we€as€sellers€ofÌservices€have€a€right€to€know€who€we€do€business€with.ÌThat's€the€key€here,€and€the€LECs€are€the€ones€thatÌcontrol€this€data.Ì€€€€€€€€I€believe€the€industry€at€large€would€love€toÌget€away€from€LEC€billing€if€they€could€get€all€theÌinformation€necessary€from€the€LECs€and€bill€this€as€aÌcommercial€contract.€€That's€something€that€we€wouldÌlove€to€have,€but€we€don't€have€all€the€access€that€weÌneed.€€We€don't€have€all€the€data.€€It's€there,€but€it'sÌ--€it's€diverse,€and€it's€not€available€to€us.Ì€€€€€€€€MS.€HARRINGTON:€€Okay,€we€are€going€to€hear€fromÌAlan.Ì€€€€€€€€MR.€TAYLOR:€€Thank€you.ÌÐ	   	 ì,'2   Ð€€€€€€€€I€want€to€go€back€just€briefly€to€the€dialogueÌabout€the€--€the€LIDB€billing€system.€€I€certainlyÌunderstand€Kim's€comments€about€why€you€need€to€knowÌthis€information€if€you€are€using€the€900€code.Ì€€€€€€€€I€guess€I€want€to€sort€of€support€theÌinformation€industry's€position,€however,€if€theÌdifferent€service€access€codes€are€going€to€continue€toÌbe€allowed€to€be€used,€then€I€think€the€LIDB€system€isÌ--€it€would€be€beneficial€for€these€folks€to€haveÌaccess€to€it,€and€I€think€the€LIDB€system€is€where€theÌbilling€block€option€could€be€made€apparent€to€theÌindustry€so€that€those€folks€who€say€in€advance€we€don'tÌwant€services€from€anyone€else,€that€information€couldÌbe€made€available€to€them€through€this€LIDB€system.Ì€€€€€€€€MR.€R.€GORDON:€€If€I€may,€just€--Ì€€€€€€€€MS.€HARRINGTON:€€No,€just€one€second.€€We€areÌgoing€to€hear€from€Susan,€we€are€going€to€have€aÌquestion€from€Allen.Ì€€€€€€€€MS.€GRANT:€€I'm€wondering€--€sorry,€I'mÌwondering€if€another€approach€to€this€whole€concern,Ìrather€than€creating€essentially€a€black€list€ofÌconsumers,€would€be€to€use€the€wealth€of€demographic€andÌmarketing€information€that's€out€there€to€target-marketÌyour€services€to€particular€consumers€who€you€thinkÌwould€be€most€interested€in€them€and€invite€them€toÌÐ	   	 ì,'2   Ðsubscribe€to€participate€in€them.Ì€€€€€€€€MS.€HARRINGTON:€€Allen?Ì€€€€€€€€MR.€HILE:€€My€question€is€a€bit€related€to€that,Ìthe€issue€of€targeting.€€What€would€prevent,€if€a€dataÌbase€were€available€that€showed€everyone€with€900€numberÌblocking,€what€would€prevent€someone€from€flipping€thatÌaround€and€targeting€those€folks€for€international€callsÌwhere€they€don't€enjoy€the€protections€of€having€the€900Ìnumber€blocking?Ì€€€€€€€€In€other€words,€using€it€for€exactly€theÌopposite€purpose€that€you're€talking€about.€€Can€anyoneÌrespond€to€that?Ì€€€€€€€€MS.€HARRINGTON:€€I€would€like€to€hear€--€I€haveÌgot€an€order€here,€but€who€has€responses€to€either€ofÌthese€last€two€questions?Ì€€€€€€€€MR.€R.€GORDON:€€I€have€a€response€to€the€blackÌlist.€€We€are€not€talking€about€a€black€list.€€WhatÌwe're€talking€about€is€an€informed€list.Ì€€€€€€€€MS.€HARRINGTON:€€Okay.Ì€€€€€€€€MR.€R.€GORDON:€€Again,€I€want€to€go€back€andÌsupport€the€attorney€general€position.€€Know€yourÌcustomer.Ì€€€€€€€€MS.€HARRINGTON:€€Richard,€I€think€you€areÌpressing€your€luck€here.Ì€€€€€€€€The€answers€to€these€questions,€Walt?ÌÐ	   	 ì,'2   Ð€€€€€€€€MR.€STEIMEL:€€Yeah,€I€think€it€would€beÌvirtually€impossible,€if€900€were€loaded€in€the€LIDB,€itÌwould€be€virtually€impossible€for€somebody€in€theÌindustry€to€develop€any€kind€of€list€they€can€use€forÌmarketing,€black€listing€or€otherwise.€€What€you€areÌtalking€about€is€a€call€comes€in,€you€take€the€ANI,€youÌbounce€it€off€LIDB€and€it€comes€back€and€lets€you€knowÌif€there€are€blocks.Ì€€€€€€€€You€would€have€to€build€a€computer€system€thatÌsequentially€went€through€every€phone€number€in€theÌcountry€on€a€regular€basis€and€collected€all€theÌblocking€information.€€This€isn't€something€you€dial€inÌand€you€look€up€and€say,€I€want€to€know€everybody€inÌSouthwestern€Bell€territory€that's€got€collect€callingÌblock€or€third-party€billing€block.€€The€other€blocksÌare€already€in€there.€€The€900€block€is€the€only€one€notÌin€the€system.Ì€€€€€€€€If€an€ANI€was€coming€in,€a€provider€looked€at€itÌand€said€this€call€is€going€to€a€service€that€we€thinkÌis€an€information€service€that€we€want€to€extend€TDDRAÌprotection€to,€then€they€would€just€like€to€see€if€theÌblock€was€there,€and€they€would€shunt€the€call€offÌsomewhere€else,€either€put€a€live€operator€on,€deny€theÌcall,€something€like€that,€but€it€would€be€almostÌimpossible€to€build€a€data€base.ÌÐ	   	 ì,'2   Ð€€€€€€€€So,€these€privacy€concerns€and€target€marketingÌand€building€data€bases€is€virtually€impossible€when€youÌare€talking€about€LIDB€look€up€on€an€instantaneous€callÌthat's€coming€in,€and€if€you€restrict€it€to€just€thatÌkind€of€look-up€in€the€data€base,€the€industry€will€notÌbe€able€to€abuse€that€and€there€is€no€real€privacyÌconcern€here.Ì€€€€€€€€MS.€HARRINGTON:€€Kim?Ì€€€€€€€€MS.€WILLIAMS:€€As€far€as€LIDB€goes,€myÌunderstanding€is€some€LECs€are€working€towards€a€serviceÌcalled€a€get-data€request,€and€if€you€get€down€to€shouldÌ900€blocking€be€out€there,€this€could€be€an€area€whereÌit€should€be€looked€at.€€I€think€Southwestern€Bell€isÌworking€on€it,€I€don't€know€if.Ì€€€€€€€€Every€LEC€is€going€to€add€it€to€their€LIDB€orÌnot,€but€you€would€be€able€to€do€a€check€on€LIDB€on€aÌphone€number,€and€it's€a€get€data,€what€does€thisÌcustomer€have,€you€know,€it€will€tell€you,€he€hasÌcollect€blocking,€third€number€blocking€and€certainÌtypes€of€other€things.€€He's€a€hotel€or€it's€aÌdormitory.€€Every€blocking€as€far€as€I€know€is€not€setÌup€to€be€out€there€yet.€€It's€not€--€but€I€think€if€900Ìblocking€were€going€to€be€there,€that€would€be€a€goodÌplace€for€it.€€You€are€talking€about,€though,€the€LECsÌspending€the€money€to€put€this€stuff€out€there.€€If€youÌÐ	   	 ì,'2   Ðall€want€to€come€up€with€a€pool€of€money€to€get€all€theÌLECs€to€do€this€and€to€get€this€--€the€information€outÌthere,€it€could€probably€happen.€€I€don't€think€there€isÌa€privacy€concern€if€it's€on€LIDB.Ì€€€€€€€€I'm€saying€there€is€a€privacy€concern€for€us€toÌgive€you€a€wholesale€list€of€every€customer€who€has€900Ìblocking.€€So,€I'm€not€saying€LIDB€is€--€that€there€isÌno€way€it€can€be€done,€although€I€don't€want€to€speakÌfor€every€LEC€in€that.€€It's€a€decision€that€has€to€beÌmade€by€the€LECs€and€whether€they€want€to€spend€theÌmoney€on€it,€but€what€I'm€saying€is€it's€not€a€cheapÌthing€to€do,€and€to€say€the€LECs€must€provide€it,€well,Ìwho€is€going€to€pay€for€it?Ì€€€€€€€€Am€I€going€to€be€able€to€address€some€of€thoseÌother€billing€issues?Ì€€€€€€€€MS.€HARRINGTON:€€Um-hum,€sure.Ì€€€€€€€€MS.€WILLIAMS:€€Okay.Ì€€€€€€€€MS.€HARRINGTON:€€Albe?Ì€€€€€€€€MR.€ANGEL:€€The€question€of€who€is€going€to€payÌfor€it,€we€have€got€a€fact€here€that€hundreds€ofÌmillions€of€dollars€are€being€charged€back.€€It's€aÌstructural€problem.€€The€LECs€are€in€a€position€whereÌthey€can€do€something€about€it,€but€they€are€passing€theÌpain€down€the€line.€€The€industry€is€asking€for€dataÌbases€that€are€responsive,€information€that€gives€them€aÌÐ	   	 ì,'2   Ðchoice€to€make€intelligent€decisions,€very€sensitive€toÌthe€issue€of€the€consumers'€choices€being€heard.Ì€€€€€€€€We€all€are€familiar€with€credit€card€systems€andÌthe€way€in€which€if€you're€somehow€spending€a€lot,€youÌmay€at€a€merchant€location€be€asked€to€talk€to€theÌcredit€card€company€and€say,€yes,€it's€me,€I'm€doingÌsome€holiday€shopping€now.€€We€want€the€same€sort€ofÌflexibility€in€the€audiotext€environment,€and€it's€notÌenough€to€say€who€is€going€to€pay€for€it.€€It's€enoughÌto€say€what€systems€are€necessary€and€how€do€weÌimplement€them€to€reduce€the€chargebacks.Ì€€€€€€€€MS.€HARRINGTON:€€Joel?Ì€€€€€€€€MR.€DICHTER:€€Just€responding€quickly€to€Alan,€IÌwant€to€agree€partly€with€--€altogether€with€what€WaltÌhad€to€say€and€add€to€that€a€little€bit,€that€the€wayÌLIDB€usually€works€is€through€a€separate€data€base,€andÌit€is€not€information€that€is€available€to€the€specificÌinformation€provider.€€There€is€this€company€calledÌCartel€who€maintains€a€data€base,€you€can€sendÌinformation€or€billing€tapes€to€them,€and€they€can€clearÌit€to€see€whether€their€customer€has€blockingÌinformation,€et€cetera.Ì€€€€€€€€So,€it's€something€that's€not€necessarily€in€theÌhands.€€You€also€can€put€protections€in€place.€€ForÌexample,€if€you€want€to€go€to€a€local€phone€company€andÌÐ	   	 ì,'2   Ðsay€I€would€like€to€know€the€billing€name€and€addressÌfor€a€certain€person€who€called,€I€think€there€is€aÌcontractual€provision€between€the€local€phone€companyÌand€the€person€who€gets€it€to€who€says€this€informationÌwill€only€be€used€for€billing€and€collection€purposes,Ìit€will€not€be€used€for€any€other€marketing€or€targetingÌinformation.Ì€€€€€€€€And€also,€Alan,€I€think€it's€right€that€peopleÌwant€to€target€a€customer€who€will€call€and€pay€forÌtheir€services,€and€that€--€and€that's€who€you'reÌtargeting€to,€not€to€someone€who€is€going€to€use€but€notÌpay€for€your€services.Ì€€€€€€€€MS.€HARRINGTON:€€Marianne€has€a€question.Ì€€€€€€€€MS.€SCHWANKE:€€What€conclusion€can€you€draw€fromÌthe€fact€that€somebody€has€a€900€block?€€If€you€had€thatÌinformation€available,€do€you€draw€the€conclusion€thatÌthey€don't€want€access€to€any€other€kinds€services€orÌthat€they€just€don't€want€someone€in€their€house€to€pickÌup€the€phone€and€incur€costs€but€that€they€might€wantÌaccess€to€other€services?€€So,€what€would€thatÌinformation€do€and€how€would€you€use€that?Ì€€€€€€€€MS.€HARRINGTON:€€Okay,€let's€--€Don,€you're€nextÌanyway.Ì€€€€€€€€MR.€KLUG:€€I€wanted€to€respond€to€Allen'sÌquestion,€also€to€Marianne's€question.€€In€terms€of€ifÌÐ	   	 ì,'2   Ð900€ANIs€were€made€available,€couldn't€marketers€thenÌuse€that€information€to€market€other€dialing€plans,€IÌthink€it€just€goes€back€to€Joel's€point,€is€if€peopleÌwere€blocking,€they€obviously€are€not€good€targetÌprospects,€so€why€try€and€market€to€them€with€anotherÌdialing€plan?Ì€€€€€€€€MR.€HILE:€€Well,€in€an€analogous€situation,€weÌsee€a€lot€of€folks€who€have€been€turned€down€for€creditÌtargeted€by€credit€scams.€€That's€exactly€the€sameÌthing,€and€you€have€--€you€have€a€big€gun€here.€€You€canÌdeny€service€if€consumers€fail€to€pay€theseÌinternational€charges.Ì€€€€€€€€MR.€KLUG:€€I'm€not€sure€I€buy€into€your€analogy,Ìbut€that's€all€right.Ì€€€€€€€€In€terms€of€Marianne's€question€--€sorry,€I€justÌforgot€it.Ì€€€€€€€€MS.€HARRINGTON:€€What€assumption€do€you€drawÌfrom€a€900€block?Ì€€€€€€€€MR.€KLUG:€€I€would€assume€that€people€do€notÌwant€unauthorized€access,€and€I€would€think€it'sÌprimarily€--€primarily€kids,€not€to€call€those€900Ìnumbers.€€I€would€think€that€adults€have€the,€you€know,Ìdon't€need€a€block,€because€they€can€choose€who€theyÌcall,€or€other€people€--€other€people€might€have€accessÌto€their€telephone.ÌÐ	   	 ì,'2   Ð€€€€€€€€MS.€HARRINGTON:€€Okay,€Adam,€a€question?Ì€€€€€€€€MR.€COHN:€€Relating€to€this€issue€of€what€does€aÌ900€number€block€mean,€I€would€like€to€put€out€theÌquestion€of€what€is€to€stop€industry€or€someone€fromÌadding€data€to€this€data€base€of€900€number€blocks€andÌbasically€asking€the€consumer€whether€they€want€--€whatÌtype€of€blocking€they€want,€and€right€now,€there€doesn'tÌseem€to€be€any€real€centralized€option€for€a€consumer€toÌsay€I€want€to€block€all€access€that€you€can€dialÌautomatically€without€a€credit€card.€€You€can€--€you€canÌblock€all€international€sometimes,€apparently.€€You€canÌblock€900€numbers€pretty€much€all€the€time€if€you€wantÌto,€but€why€not€ask€the€consumer€what€do€you€want€toÌblock€and€then€give€them€the€option€of€blocking,Ìalthough€I€don't€think€we€necessarily€have€to€determineÌwhat€to€do€with€900€if€the€consumer€is€given€the€optionÌof€determining€what€types€of€blocks€they€want.Ì€€€€€€€€MS.€HARRINGTON:€€Okay,€that's€another€questionÌout€there.Ì€€€€€€€€Linda,€you€have€had€--€do€you€have€anything€onÌthese€questions,€because€I€will€come€back€to€you.Ì€€€€€€€€MS.€GOLDSTEIN:€€I€don't€remember€which€questionÌit€is,€but€it's€responsive€to€some€question.Ì€€€€€€€€MS.€HARRINGTON:€€We€are€talking€about€dataÌbases,€blocking,€information€about€who€has€blocking,€howÌÐ	   	 ì,'2   Ðit's€used,€what€assumptions€are€drawn,€whether€it'sÌanalogous€to€a€credit€situation.€€That's€the€generalÌsubject€on€the€table€here.Ì€€€€€€€€MS.€GOLDSTEIN:€€Okay,€there€were€really€a€coupleÌof€points€floating€that€I€wanted€to€address.€€I€don'tÌreally€view€the€provision€of€this€information€asÌanalogous€really€to€sharing€credit€information.€€ItÌreally€is€more€analogous€to€determining€who€may€beÌinterested€in€the€service€and€who€is€likely€to€be€aÌresponsible€customer,€which€I€think€is€slightlyÌdifferent€--Ì€€€€€€€€MS.€HARRINGTON:€€Two€different€matters€there,ÌLinda,€who€is€interested€and€who€is€likely€to€beÌresponsible.€€One€is€consumer€opting€in,€the€other€isÌcreditor€making€judgment.Ì€€€€€€€€MS.€GOLDSTEIN:€€There€is€a€credit€implication€toÌit,€there€is€no€question€about€that,€because€of€theÌnature€of€the€service,€but€I€think€it€--€I€think€we€alsoÌhave€to€step€back€and€recognize€the€uniqueness€of€theÌservice,€that€this€is€still€the€only€type€of€serviceÌthat's€offered€instantaneously€and€for€which€theÌconsumer€can€obtain€the€full€benefit€of€the€service€andÌthen€determine€not€to€pay€with€no€obligation€really€toÌreturn.Ì€€€€€€€€So,€the€measures€that€we€then€take€to€protectÌÐ	   	 ì,'2   Ðthe€competing€interests€I€think€still€have€to€beÌmeasured€against€that€unique€aspect€of€this€service.€€IÌthink€the€industry's€need€to€have€this€information€isÌoutweighed€by€any€privacy€concerns.€€I€don't€frankly€seeÌa€privacy€concern€here.€€There€--€the€--€to€the€extentÌthat€the€information€may€be€made€available,€I€think€thatÌthere€are€ways€to€handle€any€privacy€concerns€that€mayÌarise.Ì€€€€€€€€One,€there€could€be€some€sort€of€notice€at€theÌtime€that€the€consumer€institutes€the€blocking,€simplyÌto€the€effect€that€this€information€will€be€madeÌavailable€on€a€limited€basis,€and€secondly,€there€couldÌbe€an€agreement€on€the€part€of€those€to€whom€theÌinformation€is€made€available€that€they€agree€not€to€useÌit€for€any€marketing€purposes.Ì€€€€€€€€I€think€everyone€around€this€table€has€made€itÌclear€that€there€really€isn't€an€intention€to€have€thisÌinformation€to€conduct€other€marketing€programs.€€IÌdon't€see€the€analogy€here€to€a€situation€where€thisÌinformation€is€going€to€be€then€given€to€someÌinformation€provider€who€is€going€to€target€thoseÌconsumers€who€have,€you€know,€a€bad€--€a€secured€creditÌcard€program.€€That€doesn't€seem€to€be€what's€drivingÌthe€information€here,€and€it€seems€to€me€that€it's€a€--Ìit's€a€relatively€simple€step€to€take.ÌÐ	   	 ì,'2   Ð€€€€€€€€Experience€in€other€industries€and€practices€hasÌshown€that€chargeback€rates€in€general€will€go€down€whenÌyour€marketing€efforts€are€targeted€at€those€consumersÌwho€have€indicated€a€desire€or€likelihood€they€want€toÌavail€themselves€of€those€services,€and€to€the€--€IÌthink€every€incremental€step€that€you€can€take€to€reduceÌchargebacks€will€help,€and€I€just€--€I€don't€see€theÌprivacy€issue€here€as€a€really€significant€issue,€and€IÌthink€it's€one€that€could€be€dealt€with€with€relativelyÌsimple€measures.Ì€€€€€€€€The€other€point€I€just€wanted€to€make,€and€thisÌgoes€back€to€a€point€that€you€really€raised€muchÌearlier,€and€I€don't€know€that€I€can€give€you€theÌspecifics€for€the€record,€but€I€will€go€back€and€see€ifÌwe€can,€because€I€think€it€would€be€instructive,€goesÌback€to€things€that€can€be€done€really€at€the€LEC€levelÌwhen€the€--€when€the€customer€first€calls€in,€and€we€doÌhave€one€member€that€actually€conducted€a€test€programÌwherein€specific€questions€were€asked,€not€in€anyÌthreatening€or€harassing€manner,€but€some€probingÌquestions€of€customers€that€called€in€to€deny€chargesÌabout€is€it€possible€that€your€husband€made€it€orÌadditional€questions€asked€that€made€the€consumerÌrespond€in€a€little€bit€more€detail€about€why€theÌcharges€were€being€denied.ÌÐ	   	 ì,'2   Ð€€€€€€€€And€the€results€of€that€test€program€were€ratherÌsignificant,€and€if€I€recall,€I€think€the€reduction€wasÌin€the€neighborhood€of€10€percent,€and€I€will€see€ifÌthat's€something€that€could€be€made€available€on€theÌrecord.€€At€this€point,€I€offer€it€simply€anecdotally,Ìbut€I€think,€you€know,€we€have€sort€of€gotten€off€trackÌof€additional€measures€that€could€be€taken€at€the€LECÌlevel€to€try€to€address€this€problem,€and€I€do€thinkÌthat's€still€another€area€of€inquiry.Ì€€€€€€€€MS.€HARRINGTON:€€Okay,€we€have€an€hour€and€tenÌminutes€left€in€this€session.€€We€have€not€explored€theÌinternational€dialing€pattern€issues€that€are€raised€inÌthe€agenda,€nor€have€we€discussed€changing€the€notice€toÌconsumers€in€the€statement,€and€those€are€very€importantÌissues€raised€by€commenters,€and€I€want€to€have€fullÌdiscussion.Ì€€€€€€€€I€am€going€to€ask€Richard€and€Albe,€do€you€haveÌanything€new€to€say€--€and€I€don't€mean€that€in€a€rudeÌway,€because€what€I€would€like€to€do€is€take€aÌten-minute€break,€we€said€there€would€be€a€break€aroundÌ11:00,€and€then€we€are€going€to€resume€at€11:30,€andÌjust€a€minute.Ì€€€€€€€€I€know€I€said€I€was€going€to€get€back€to€Kim,Ìbut€Kim,€is€there€--€do€you€have€anything€new€on€--Ì€€€€€€€€MS.€WILLIAMS:€€Well,€I€wanted€to€respond€to€someÌÐ	   	 ì,'2   Ðof€the€earlier€issues€about€billing€and€collections€thatÌcame€up€and€some€of€I€guess€the€accusations€against€theÌLEC€that€--Ì€€€€€€€€MS.€HARRINGTON:€€Can€I€give€you€five€minutesÌafter€the€break€to€do€that,€and€then€we€are€going€toÌmove€off€of€those€issues,€because€we€do€have€otherÌimportant€issues€that€we€want€to€cover€in€terms€ofÌindustry€perspective€on€the€chargeback€issue€in€thisÌindustry.Ì€€€€€€€€We€will€resume€promptly€at€11:30,€and€there€isÌmore€coffee,€and€the€rest€rooms€are€right€outside.Ì€€€€€€€€Thank€you.Ì€€€€€€€€òò(A€brief€recess€was€taken.)Ð   	 œÀ   Ðóó€€€€€€€€MS.€HARRINGTON:€€Barbara,€could€you€take€yourÐ   	 ,P   Ðseat,€and€we€are€going€to€ask€you€to€introduce€yourselfÌfor€the€record.€€We€have€a€participant€who€was€delayedÌby€a€late€flight€taking€her€seat€at€the€table,€and€forÌthe€benefit€of€our€participants€and€our€stenographer,Ìwould€you€identify€yourself,€Barbara?Ì€€€€€€€€MS.€MAJESKI:€€My€name€is€Barbara€Majeski.€€IÌrepresent€SNET€from€Connecticut.€€We€represent€only€aÌsingle€state.€€I€work€in€the€regulatory€affairs€group,Ìand€part€of€my€function€is€to€respond€to€FCCÌcomplaints.Ì€€€€€€€€MS.€HARRINGTON:€€SNET€is?ÌÐ	   	 ì,'2   Ð€€€€€€€€MS.€MAJESKI:€€Southern€New€England€Telephone.Ì€€€€€€€€MS.€HARRINGTON:€€Just€for€the€record,€thankÌyou.€€There€is€lots€more€that€can€be€said€on€all€of€theÌissues€that€we€have€just€discussed,€but€now€we€are€goingÌto€focus€on€some€different€issues,€but€Kim€first€isÌgoing€to€give€us€no€more€than€five€minutes€on€the€otherÌissues.Ì€€€€€€€€MS.€WILLIAMS:€€Thank€you,€Kim€Williams.Ì€€€€€€€€I€guess€I€wanted€to€address,€number€one,€someÌcarriers'€concerns€or€IPs'€concerns€that€the€LECs€areÌcavalier€about€the€900€charges,€and€I€can't€speak€forÌevery€LEC,€but€I€know€when€a€customer€calls€in€to€us,Ìwhether€it's€900€or€not,€we€go€through€the€process€ofÌtrying€to€sustain€the€call,€and€I€think€some€of€theÌthings€down€at€the€end€of€the€table€suggested€were€didÌyou€make€the€call,€did€somebody€else€in€the€householdÌmake€the€call,€and€we€do€all€those€things.€€We€justÌdon't€do€you€don't€want€to€pay€it,€we€will€take€it€offÌthe€bill.Ì€€€€€€€€And,€in€fact,€I€used€to€support€the€businessÌoffice€before€I€had€the€job€I€have€now,€and€I€haveÌtalked€to€many€service€reps,€and€it€angers€them€to€haveÌcustomers€run€up€thousands€of€dollars€worth€of€chargesÌthat€they€don't€want€to€pay,€but€we€are€in€the€middle€ofÌthat€situation€where€we€have€already€bought€thoseÌÐ	   	 ì,'2   Ðreceivables€from€you.€€If€we€did€it€because€of€a€reducedÌrate€because€of€adjustments,€that€doesn't€mean€we€don'tÌsend€it€back€to€you.Ì€€€€€€€€I€might€have€confused€that€issue€before,€butÌhowever,€one€for€one,€we€don't€eat€write-offs.€€It€goesÌback€to€the€company€who€sent€it€to€us€to€bill.ÌSouthwestern€Bell€does€not€take€that€loss.Ì€€€€€€€€Number€two,€I€guess€the€issue€of€customersÌcalling€back€more€than€60€days€later,€I€don't€want€toÌmake€it€sound€like€that's€only€a€900€thing.ÌSouthwestern€Bell€gets€calls€from€customers€aboutÌregular€toll€charges€more€than€60€days€later€--Ì€€€€€€€€MS.€HARRINGTON:€€Well,€except€there€is€aÌregulation€on€the€books€here.Ì€€€€€€€€MS.€WILLIAMS:€€And€I€guess€I€need€to€look€intoÌfurther€what€that€says,€and€I€don't€want€to€address€thatÌincorrectly,€but€our€billing€contracts€give€us€theÌauthority€to€remove€charges€from€our€bill,€and€when€ourÌbilling€contracts€are€signed,€carriers€know€what€theirÌ--€or€our€customers€know€exactly€what€they€areÌsigning.€€We€have€the€sole€authority€to€remove€chargesÌfrom€our€bill€if€they€are€not€going€to€be€paid€in€mostÌinstances,€and€900€or€not,€we€are€going€to€take€it€offÌthe€bill€if€the€customer€is€not€satisfied.Ì€€€€€€€€If€the€customer€can't€pay,€won't€pay,€we€willÌÐ	   	 ì,'2   Ðeither€take€it€off€or€he€is€going€to€be€disconnected€forÌnonpayment€and€his€charges€will€be€sent€out€to€aÌcollection€agency.€€So,€the€issue€is€not€just€an€issueÌof€900€in€that€case.€€We€do€that€for€all€charges.Ì€€€€€€€€In€the€case€of€900,€if€he€won't€pay€it,€what€doÌI€do€with€it?€€Then€it's€a€balance€on€his€account€forÌyears€and€years€to€come,€and€it's€money€that€I€don'tÌhave€now,€not€you,€me,€and€so€in€that€respect€it's€ourÌaddressed€in€our€contracts€that€we€remove€all€chargesÌfrom€the€bill€for€nondeniable€services€if€they€are€notÌpaid.Ì€€€€€€€€I€guess€finally,€on€the€issue€of€the€contracts,Ìyou€have€--€I€guess€for€900€services,€I€feel€like€youÌhave€a€choice€on€how€you€want€to€bill€those€services.ÌYou€can€bill€them€on€a€charge€card,€you€can€bill€themÌdirectly,€you€can€bill€them€through€the€LEC,€you€canÌbill€them€through€some€other€company.€€If€you€choose€toÌbill€them€through€the€LEC,€it's€billed€according€to€theÌway€our€contracts€are€written.Ì€€€€€€€€MS.€HARRINGTON:€€Thank€you,€Kim.Ì€€€€€€€€Jon,€did€you€want€to€say€something€on€this?Ì€€€€€€€€MR.€SHAUB:€€Yes,€if€you€will€allow€it.Ì€€€€€€€€MS.€HARRINGTON:€€I€will€let€you,€and€then€we€areÌgoing€to€move€on.Ì€€€€€€€€MR.€SHAUB:€€I€was€just€going€to€suggest€that€forÌÐ	   	 ì,'2   Ðthe€purpose€of€substituting€a€word€in€what€Kim€said,Ìrather€than€say€cavalier€in€collections,€I€think€aÌmiddle€ground€that€we€are€all€talking€about€is€perhaps€aÌmore€consistent€discipline.€€Everyone€would€benefit,€theÌeffectiveness€of€the€billing,€the€reduction€of€fraud,Ìeverything€would€benefit€if€there€was€a€more€predictableÌtreatment€on€all€aging€receivables€within€the€bounds€ofÌthe€contract€and€within€the€bounds€of€the€legislationÌthat€exists,€but€there€is€a€lack€of€consistency,€amongÌLECs,€among€billing€entities,€as€to€how€that's€doneÌtoday.€€So,€doing€that€consistently,€doing€that€on€anÌaccelerated€basis,€would€then€open€up€options€withinÌexisting€legislation€and€contracts,€and€this€could€beÌmanaged€more€effectively.Ì€€€€€€€€MS.€HARRINGTON:€€Richard?Ì€€€€€€€€MR.€R.€GORDON:€€Just€one€comment€I€would€like€toÌmake.€€Kim€said€that€this€is€done€at€the€sole€authorityÌof€the€LEC,€and€the€problem€that€we€as€an€industry€haveÌis€the€sole€authority€of€the€LEC€is€not€consistent€withÌthe€law.Ì€€€€€€€€MS.€HARRINGTON:€€Okay,€we€are€all€going€to€moveÌon€now€to€the€--€to€two€very€important€issues.€€One€isÌthe€issue€of€chargebacks€for€international€audiotextÌcalls€and€who€bears€the€costs€for€those.€€I€am€sure€thatÌwe€are€going€to€have€a€lot€of€conversation€later€when€weÌÐ	   	 ì,'2   Ðtalk€about€changing€the€definition€of€pay-per-callÌservices,€about€the€problem€of€the€internationalÌpattern.€€Here€we're€focused€more€on€the€chargebackÌissue€as€it€flows€from€the€use€of€the€internationalÌdialing€pattern€for€pay-per-call€service.€€So,€let's€beÌclear€on€what€we're€talking€about€and€what€we're€not.Ì€€€€€€€€So,€I'm€looking€at€the€second€bullet€item€underÌyour€agenda€here€that€begins,€"Who€bears€the€costs€ofÌchargebacks€for€international€audiotext€calls?€€Are€IPsÌwho€utilize€international€audiotext€services€affected€inÌany€way€by€consumers'€refusal€to€pay€for€such€services?ÌWhat€problems€do€the€chargebacks€cause€for€the€LECs,€theÌcarriers€and€the€consumers?"€€If€we€could€focus€on€thatÌcluster€of€questions.Ì€€€€€€€€Joel?Ì€€€€€€€€MR.€DICHTER:€€Eileen,€let's€start€with€I€guessÌthe€first€question,€who€bears€the€costs€of€theÌchargebacks,€and€as€was€said€a€little€earlier,€at€thisÌpoint€in€time,€as€we€move€forward€in€the€spectrum,€theÌanswer€is€virtually€everyone€in€the€chain,€except€maybeÌthe€local€exchange€carrier€to€some€extent,€in€that€whenÌyou€place€an€international€audiotext€call,€you€goÌthrough€your€normal€picked€carrier.Ì€€€€€€€€So,€if€you're€an€AT&T€customer,€you€go€throughÌAT&T€lines,€you're€charged€by€AT&T€under€theirÌÐ	   	 ì,'2   Ðinternational€tariff€at€their€standard€internationalÌtariff€rates€for€calls€between€those€destinations,€andÌthen€they€bill€you€and€it€appears€on€your€phone€bill.ÌYou€then€either€pay€your€charge€or€you€can€dispute€theÌcharge€by€contacting€the€carrier,€in€this€case€anÌexample€would€have€been€AT&T.Ì€€€€€€€€AT&T€then€has€the€discretion€--€they€are€theÌbilling€company,€it€is€not€the€information€provider€orÌthe€foreign€telephone€company.€€AT&T€has€the€discretionÌwhether€or€not€to€issue€a€credit€to€that€consumerÌresulting€in€a€chargeback€--Ì€€€€€€€€MS.€HARRINGTON:€€Let€me€ask€you€a€question,ÌJoel.€€Doesn't€AT&T€still€have€an€obligation€to€pay€theÌinternational€carrier,€whether€they€decide€to€extend€theÌcredit€or€not?Ì€€€€€€€€MR.€DICHTER:€€In€the€past,€that€was€the€case.ÌIn€recent€times,€that€is€no€longer€the€case.Ì€€€€€€€€MS.€HARRINGTON:€€Well,€can€you€tell€me€whyÌthat's€no€longer€the€case€and€by€what€authority€it's€noÌlonger€the€case?Ì€€€€€€€€MR.€DICHTER:€€There€have€been€negotiations€goingÌon€between€the€long€distance€interexchange€carriers,€theÌgovernments,€and€there€is€also€the€foreign€PTTs€or€theÌforeign€telephone€companies,€and€in€their€arrangementsÌbetween€them,€they€have€now€entered€into€an€agreementÌÐ	   	 ì,'2   Ðwhereby€if€AT&T€is€not€paid€by€its€customers,€they€noÌlonger€have€to€pay€the€settlement€rate€to€the€foreignÌtelephone€company.Ì€€€€€€€€MS.€HARRINGTON:€€But€does€that€cover€theÌsituation€where€AT&T€determines€to€extend€the€credit€orÌto€forgive€the€charge€or€only€where€the€customer€doesn'tÌpay?Ì€€€€€€€€MR.€DICHTER:€€It€would€be€in€either€event,Ìwhether€the€customer€chooses€not€to€pay€or€AT&T€says€weÌwill€forgive€the€charge.€€In€that€case,€they€do€not€haveÌto€pay€the€foreign€telephone€company.Ì€€€€€€€€MS.€HARRINGTON:€€Marianne?Ì€€€€€€€€MS.€SCHWANKE:€€And€is€that€true€for€all€longÌdistance€carriers€that€carry€service€to€foreignÌcountries?Ì€€€€€€€€MR.€DICHTER:€€It€is€for€--€for€all?€€ItÌcertainly€would€be€true€for€90-some€odd€percent€of€theÌtraffic.€€I€can't€say€it's€true€for€100€percent€of€theÌtraffic€at€this€point€in€time.Ì€€€€€€€€MS.€HARRINGTON:€€Jon,€is€that€true€for€--€doesÌthat€reflect€your€understanding?Ì€€€€€€€€MR.€SHAUB:€€I€am€not€specifically€aware€of€thoseÌagreements.€€I€have€heard€discussions€like€that,€but€IÌam€not€in€that€part€of€the€business,€so€I€can't€commentÌon€the€particulars.ÌÐ	   	 ì,'2   Ð€€€€€€€€MS.€HARRINGTON:€€When€did€these€agreementsÌbecome€effective,€Joel?Ì€€€€€€€€MR.€DICHTER:€€Depending€--€it's€aÌcountry-by-country€type€of€arrangement,€and€they€haveÌbecome€effective€primarily€within€the€last€six€months€isÌwhen€there€has€been€movement.Ì€€€€€€€€MR.€HILE:€€Is€there€such€an€agreement€withÌGuyana?Ì€€€€€€€€MR.€DICHTER:€€Yes,€there€is.Ì€€€€€€€€MR.€HILE:€€What€about€Muldova?Ì€€€€€€€€MR.€DICHTER:€€Muldova,€there€is€--€Muldova€goesÌ--€generally€from€--€North€American€traffic€goesÌgenerally€through€Teleglobe,€a€Canadian€long€distanceÌcarrier,€and€in€that€instance,€I€believe€they€do€nowÌhave€such€an€arrangement€to€forgive€the€charges.€€IÌthink€it's€more€on€a€case-by-case€basis,€but€generallyÌthat's€the€--€that€would€happen.Ì€€€€€€€€MS.€HARRINGTON:€€Sao€Tome?Ì€€€€€€€€MR.€DICHTER:€€Sao€Tome€also€has,€I€believe€--Ì€€€€€€€€MS.€HARRINGTON:€€Dominican€Republic?Ì€€€€€€€€MR.€DICHTER:€€Dominican€Republic€does€have€suchÌan€arrangement,€yes,€that's€correct.Ì€€€€€€€€MS.€HARRINGTON:€€Go€ahead.Ì€€€€€€€€MR.€DICHTER:€€So,€in€those€instances,€then,€whenÌthey€don't€pay€the€foreign€telephone€company,€theÌÐ	   	 ì,'2   Ðforeign€telephone€company€then€doesn't€pay€the€bureau,Ìand€the€bureau€doesn't€pay€the€provider€of€theÌservices.€€So,€they€do,€indeed,€share€in€that€cost,€asÌwell.€€Obviously€the€long€--€the€only€one€who€I€know€--Ìwho€I€think€does€get€paid€out€of€this€arrangement€is€theÌlocal€phone€company€for€their€access€charges.Ì€€€€€€€€MS.€HARRINGTON:€€Okay,€that's€very,€veryÌinteresting.Ì€€€€€€€€Jon,€I€see€your€tent€is€up.Ì€€€€€€€€Richard,€is€your€tent€up?Ì€€€€€€€€MR.€R.€GORDON:€€Yes,€it€is.Ì€€€€€€€€MS.€HARRINGTON:€€Okay.Ì€€€€€€€€MR.€R.€GORDON:€€On€this€point,€I€would€like€toÌgo€back€to€the€fact€that€what€we€see€here€is€theÌevolution€where€the€commercial€environment€is,€in€fact,Ìbecoming€self-regulated.€€Clearly€two€or€three€yearsÌago,€there€were€problems€with€international,€and€peopleÌdid€have€some€issues€where€they€could€not€get€thoseÌcharges€erased€from€their€bill€without€undue€stress€andÌredress.Ì€€€€€€€€Today,€that's€different,€and€I'm€just€againÌcommenting€on€Joel's€comments€here,€but€what€we€reallyÌneed€--€and€we're€here€for€solutions,€we€are€not€hereÌfor€problems,€we€are€looking€for€solutions€--€what€weÌneed€is€an€open€line€of€communication€between€all€theÌÐ	   	 ì,'2   Ðparties.€€I€believe€that€I€--€I€know€that€there€are€someÌforeign€telephone€companies€present€in€the€room€here,Ìand€I€think€they€could,€if€we€wanted,€they€could€give€usÌdirect€testimony€about€what€they€do€when€they€see€anyÌtype€of€abuse.Ì€€€€€€€€And€going€back€to€the€point,€stop€the€flow€ofÌmoney,€and€you€stop€the€abuse.€€Whenever€there€is€anyÌtype€of€a€consumer€complaint€in€the€international€worldÌnow,€AT&T€and€I€believe€the€other€carriers€--€I€know€theÌother€carriers€--€are€giving€people€credits€on€theseÌthings.Ì€€€€€€€€MS.€HARRINGTON:€€Well,€this€is€a€--€I€have€toÌtell€you,€Richard,€from€a€consumer€protectionÌstandpoint,€there€is€a€rather€new€development.Ì€€€€€€€€MR.€R.€GORDON:€€Less€than€six€months,€yes.Ì€€€€€€€€MS.€HARRINGTON:€€And€there€have€been€lots€andÌlots€and€lots€of€consumers€who€have€been€ripped€off€onÌthese€international€dialing€schemes€who€weren't€able€toÌget€credits€and€whose€phone€service€was€threatened.€€WeÌhave€brought€a€lot€of€enforcement€actions,€the€statesÌhave€been€looking€at€this.Ì€€€€€€€€So,€if€it€is€as€described€now€the€case€that€theÌcarriers,€the€billing€entities,€have€the€same€discretionÌto€bill€and€collect€that€they€have€for€the€domesticÌdialing€patterns,€that's€a€new€development€that€hasÌÐ	   	 ì,'2   Ðchanged€the€situation.Ì€€€€€€€€Allen,€do€you€have€a€question?Ì€€€€€€€€MR.€HILE:€€Yes,€I€would€like€to€ask€AT&T€and€MCIÌif€they€could€supplement€the€record€on€this€at€all.€€ItÌwould€be€really€helpful€for€us€if€you€could€--Ì€€€€€€€€MS.€HARRINGTON:€€With€these€agreements€and€soÌforth?Ì€€€€€€€€MR.€HILE:€€With€the€agreements€and€what€theÌstatus€of€this€is.€€We€would€really€appreciate€that,Ìbecause€that€is€a€new€development€for€us.Ì€€€€€€€€MS.€HARRINGTON:€€Susan?Ì€€€€€€€€MS.€GRANT:€€I€think€that€--€oh,€sorry,€I€thinkÌit€would€be€really€helpful€from€as€many€as€the€longÌdistance€carriers€as€we€could€get€it,€because€we€areÌstill€getting€calls€from€the€fraud€center€from€consumersÌwho€are€getting€charges€now€that€they€are€not€able€toÌget€the€long€distance€companies€to€take€off,Ìinternational€charges.€€So,€I'm€wondering€if€that€meansÌthat€these€agreements€are€not€consistent€or€whether€--Ìhow€this€should€be€handled€when€it€comes€to€the€customerÌcalling€the€company,€just€as€an€--€as€in€getting€to€theÌright€customer€service€folks.Ì€€€€€€€€MS.€HARRINGTON:€€Well,€and€I'm€wondering€whetherÌin€the€interest€of€level€playing€field€and€so€forth,Ìwhatever€disclosure€is€made€in€the€billing€statement€toÌÐ	   	 ì,'2   Ðconsumers€about€the€process€for€disputing€charges€andÌthe€implications€of€not€paying€them€ought€to€be€includedÌon€billing€statements€that€have€calls€to€internationalÌnumbers.Ì€€€€€€€€That€is,€you€know,€if€you€guys€worked€out€theseÌagreements,€then€why€shouldn't€you€be,€you€know,€subjectÌto€the€same€fall-out€from€consumer€disclosures€as€areÌthose€who€choose€the€domestic€dialing€pattern?Ì€€€€€€€€Barbara?Ì€€€€€€€€MS.€MAJESKI:€€In€response,€in€order€for€us€toÌput€those€types€of€messages€on€the€bill,€we€have€to€knowÌthat€they€are€for€international€pay-per-call.€€So,€theÌonly€way€to€know€is€if€the€IP€or€--€or€the€IXC€sendsÌthat€along€with€the€billing€record.Ì€€€€€€€€MS.€HARRINGTON:€€And€do€they€do€that€now?Ì€€€€€€€€MS.€MAJESKI:€€No.Ì€€€€€€€€MS.€HARRINGTON:€€No.Ì€€€€€€€€Kim?Ì€€€€€€€€MS.€WILLIAMS:€€Yeah,€I€was€going€to€commentÌalong€the€same€lines,€that€unless€they€are€sent€in€underÌcertain€records€and€unless€--€I€think€withoutÌenforcement€of€a€regulatory€body,€there€is€no€guaranteeÌthat€everybody€is€going€to€follow€the€same€rules,€andÌcertainly€just€because€they€are€adjusting€them,€the€callÌhas€already€been€made,€somebody's€kid€has€already€dialedÌÐ	   	 ì,'2   Ðthe€number€or€some€unauthorized€person,€and€the€customerÌis€--€a€lot€of€them€don't€call,€because€they€perceiveÌthat€they€have€to€pay€for€the€calls.€€So,€I€think€a€lotÌmore€has€to€happen.Ì€€€€€€€€Number€one,€I€think€it€really€blocks€on€900.€€IfÌit€is€going€to€be€on€international,€it€ought€to€beÌtreated€exactly€like€the€900.€€It€ought€to€be€priceÌdisclosures.€€The€customer€shouldn't€be€charged€whenÌthey€first€call€a€number€until€they€know€how€much€it€isÌgoing€to€cost€them€to€make€that€call.€€TheÌadvertisements€need€to€be€regulated,€and€they€are€not,Ìand€I€--€you€know,€the€ones€I've€seen€still€do,€some€ofÌthem,€say€things€are€free€and€with€small€print€that€saysÌ--€in€an€abbreviated€fashion€that€international€dialingÌrates€apply.€€I€don't€know€how€many€customers€understandÌthat€"int'l"€means€international,€and€if€they€know€itÌmeans€international,€I€don't€know€if€they€know€whatÌtheir€rights€really€are.Ì€€€€€€€€MS.€HARRINGTON:€€Let€me€just€point€out€that€aÌlot€of€this€will€be€discussed€tomorrow€when€we€talkÌabout€changing€the€definition€of€pay-per-call€service,Ìand€I€want€to€hear€from€Alan€now.€€He€has€a€question.Ì€€€€€€€€MR.€TAYLOR:€€I€just€want€to€point€out€that€thereÌappears€to€be€a€tremendous€amount€of€competition€in€theÌinternational€market,€and€one€way€to€afford€theÌÐ	   	 ì,'2   Ðconsumers€the€additional€protection€that€you've€talkedÌabout€would€be€if,€you€know,€why€tariff€internationalÌcharges€anymore?€€Make€it€all€unregulated,€and€consumersÌwould€have€all€the€rights€that€they€need.Ì€€€€€€€€MS.€HARRINGTON:€€Adam?Ì€€€€€€€€MR.€COHN:€€About€the€issue€of€chargebacks€forÌinternational€calls,€I€guess€this€is€somewhat€related€toÌa€billing€insert,€you€know,€telling€consumers€of€theirÌrights,€but€who€does€a€consumer€approach€when€they€feelÌthat€they€are€being€billed€for€a€call€that€they€shouldÌnot€be€billed€in€the€international€arena?€€Who€is€the€--Ìwho€are€they€purchasing€from€and€how€do€they€identifyÌthe€final€person€who€is€--€who€is€the€merchant€really€ofÌthe€information,€the€IP?Ì€€€€€€€€MS.€HARRINGTON:€€Answers€to€that€question?Ì€€€€€€€€Jon,€did€you€have€your€card€up€because€youÌwanted€to€be€recognized?Ì€€€€€€€€MR.€SHAUB:€€Yes.Ì€€€€€€€€MS.€HARRINGTON:€€Do€you€have€an€answer€to€thatÌquestion?€€I€am€going€to€get€to€you.Ì€€€€€€€€MR.€SHAUB:€€Yes,€I€believe€I€have€an€accurateÌanswer€to€the€question.€€In€any€bill,€the€billing€entityÌwill€have€an€inquiry€number€to€contact€in€the€case€ofÌall€and€any€questions,€and€that€will€lead€the€person€toÌthe€company€that€rendered€the€bill,€who€is€able€toÌÐ	   	 ì,'2   Ðanswer€the€questions,€explain€policies,€or€give€the€nameÌ--€in€the€case€of€the€audiotext,€the€name€and€addressÌof€the€provider,€if€it's€different.Ì€€€€€€€€MS.€HARRINGTON:€€If€it's€an€information€providerÌin€Muldova,€will€AT&T€have€the€name€of€thatÌinternational€provider€or€simply€the€name€of€the€bureauÌin€Canada€that€the€call€is€routed€through?Ì€€€€€€€€MR.€SHAUB:€€I€don't€know€the€complete€answer€toÌthat€either.Ì€€€€€€€€MS.€HARRINGTON:€€Do€you€know€the€answer,€Joel?Ì€€€€€€€€MR.€DICHTER:€€I€do€not€believe€they€do.€€IÌbelieve€they€have€the€name€of€the€foreign€telephoneÌcompany,€because€that's€who€their€relationship€isÌdirectly€with.Ì€€€€€€€€MS.€HARRINGTON:€€So,€the€answer€to€Adam'sÌquestion€is€in€some€companies€the€consumer€can't€learnÌthat€information€from€the€billing€entity.€€Is€thatÌaccurate?Ì€€€€€€€€MR.€DICHTER:€€I€can€only€--€I€think€that'sÌcorrect,€because€it€is€--Ì€€€€€€€€MS.€HARRINGTON:€€Okay.Ì€€€€€€€€MR.€DICHTER:€€--€the€billing€entity's€chargesÌthat€are€appearing€on€the€bill.€€It€is€not€like€aÌ900-type€situation€where€the€information€provider€says,ÌI€want€to€charge€$3€per€minute,€and€it's€his€charge€thatÌÐ	   	 ì,'2   Ðappears€on€the€bill.€€With€an€international€call,€it'sÌthe€standard€international€tariffed€rate€service,€and€soÌit's€AT&T's€charge€or€MCI's.Ì€€€€€€€€MS.€HARRINGTON:€€Adam?Ì€€€€€€€€MR.€COHN:€€On€a€follow-up€to€that,€I€just€--€IÌwanted€to€ask,€to€what€extent€--€I€don't€know€who€to€askÌthis€question€to€really,€but€to€what€extent€are€theÌinternational€audiotext€calls€actually€going€to€anotherÌcountry€that€we€have€to€worry€about€an€IP€being€in€otherÌcountry€and€to€what€extent€are€those€calls€actually€inÌeither€the€United€States€or€in€a€country€other€than€theÌone€to€which€the€call€is€apparently€being€directedÌaccording€to€the€information€on€the€bill?Ì€€€€€€€€This€would€be€important,€I€assume,€for€aÌconsumer€if€they€--€if€they€had€a€bill€to€Muldova,Ìknowing€that€the€--€that€the€actual€IP€was€--€and€theÌphone€call€was€being€handled€in€the€United€States,€itÌwould€be€important.€€Does€anyone€have€any€information€onÌthat?Ì€€€€€€€€MR.€DICHTER:€€I€don't€have€a€full€answer€forÌthat€question.€€I€would€say,€though,€one€point€is€thatÌas€long€as€there€is€disclosure€to€the€consumer€thatÌthere€is€international€charges€that€he€can€check€withÌhis€carrier€as€to€the€rates€involved.€€You€know€the€rateÌthat's€being€charged€for€the€call,€you€know€that€you'reÌÐ	   	 ì,'2   Ðbeing€charged€that€amount,€and€you€can€make€the€decisionÌwhether€or€not€to€make€that€call,€which€is€separate€fromÌthe€decision€do€I€want€to€make€a€call€to€Muldova€or€someÌother€location.Ì€€€€€€€€MS.€HARRINGTON:€€Joel,€how€does€the€consumerÌknow€what€rate€is€being€charged€for€a€call€to€Muldova?Ì€€€€€€€€MR.€DICHTER:€€Because€he€will€know€--€he€canÌdetermine€from€the€phone€number€he's€dialing€to€that€--Ìhe€can€call€AT&T€or€call€MCI€and€say€I€want€to€know€whatÌa€call€is€for€this€code,€for€this€phone€number,€and€theyÌcan€tell€him€exactly€what€is€the€rate€for€making€thatÌspecific€phone€call.Ì€€€€€€€€MS.€HARRINGTON:€€That's€a€stretch,€Joel.Ì€€€€€€€€MR.€HERTZENDORF:€€Isn't€he€charged€for€that?Ì€€€€€€€€MR.€COHN:€€That€misses€the€question€I€was€sortÌof€actually€asking,€which€is€how€does€a€consumer€knowÌwhat€country€they€are€actually€calling.€€I€mean,€we€knowÌthat€they€are€being€billed€for€a€call€to€Muldova,€and€weÌknow€at€least€in€one€case€that€that€might€not€have€beenÌthe€case,€but€how€extensive€is€that€--€does€that€mainÌparty€here€have€any€information€with€regard€to€how€oftenÌa€call€is€actually€being€routed€to€a€country€other€thanÌthe€one€on€the€bill,€and€how€does€this€affect€theirÌability€to€seek€redress€from€the€IP?Ì€€€€€€€€MR.€DICHTER:€€The€answer€is€I€think€in€mostÌÐ	   	 ì,'2   Ðinstances,€most€all€--€and€I€can't€say€in€all€instancesÌ--€most€instances€the€call€does€go€to€thatÌdestination.€€I€don't€think€it€has€--€whether€it€--€thatÌquestion,€though,€has€any€effect€on€the€consumer'sÌability€to€get€redress€for€that€consumer€--€for€thatÌspecific€call€to€determine€whether€or€not€they€want€toÌget€a€credit€for€that€call.Ì€€€€€€€€MS.€HARRINGTON:€€Don€Klug,€do€you€have€an€answerÌto€that?Ì€€€€€€€€MR.€KLUG:€€No.Ì€€€€€€€€MS.€HARRINGTON:€€Okay,€I€am€going€to€come€backÌto€you.Ì€€€€€€€€Alan?Ì€€€€€€€€MR.€TAYLOR:€€I€would€just€like€to€supplementÌAdam's€question,€and€that€is,€is€there€anything€wrongÌwith€that€scenario?€€Is€there€any€prohibition€in€the€LECÌbilling€tariff€or€Primus€or€with€MCI's€or€AT&T's€or€NewÌEngland's€that€the€calls€are€not€actually€going€to€whereÌthey€say€they€are€going?Ì€€€€€€€€MS.€HARRINGTON:€€Kim,€could€you€answer€that,€andÌthen€we€are€going€to€go€to€Richard.Ì€€€€€€€€MS.€WILLIAMS:€€In€our€billing€contracts,€weÌrequire€that€the€records€that€are€submitted€to€us€beÌtrue€records,€that€the€calls€were€actually€made€to€thoseÌnumbers€and€to€those€countries.€€So,€we€don't€know,ÌÐ	   	 ì,'2   Ðthough,€we€have€no€way€of€knowing€that€the€call€isÌreally€terminating€there.€€We€trust€that€the€personÌsending€us€those€records€didn't€just€make€up€thoseÌrecords.Ì€€€€€€€€MS.€HARRINGTON:€€Would€you€terminate€a€customerÌwho€sent€you€records€for€calls€to€a€country€where€theÌcalls€actually€went€to€the€number€but€the€number€didn'tÌgo€to€the€country?Ì€€€€€€€€MS.€WILLIAMS:€€Would€I€terminate€billing?Ì€€€€€€€€MS.€HARRINGTON:€€Yes.Ì€€€€€€€€MS.€WILLIAMS:€€I€have.€€It€wasn't€forÌinternational,€it€was€for€a€900€issue,€but€same€thing.Ì€€€€€€€€MS.€HARRINGTON:€€All€right,€Richard?Ì€€€€€€€€MR.€R.€GORDON:€€Yes,€I€would€like€to€know€if€IÌcan€defer€to€one€of€my€colleagues€on€this€particularÌissue.Ì€€€€€€€€MS.€HARRINGTON:€€Sure,€if€there€is€a€particularÌissue,€but€you€have€to€come€to€the€table,€state€yourÌname,€tell€us€who€you€represent,€and€then€we€would€loveÌto€hear€anything€that€you€have€that€is€enlightening.Ì€€€€€€€€MR.€LESSER:€€My€name€is€Todd€Lesser,€I€am€fromÌthe€TSIA,€and€you€had€asked€some€questions€I€thinkÌdirectly,€and€I€wanted€to€answer€each€specific€one,€andÌfirst,€what€is€billing.€€I€think€it's€more€--€I€know€weÌare€going€to€address€this€issue€more€tomorrow,€but€IÌÐ	   	 ì,'2   Ðthink€we€have€touched€on€a€few€of€the€internationalÌissues,€and€I€think€as€far€as€knowing€where€the€consumerÌis€making€the€call€and€where€it€really€goes,€the€keyÌissue€is€is€the€consumer€being€informed,€is€the€consumerÌcalling€a€number€and€all€of€a€sudden€it€appearing€as€aÌcall€to€the€Dominican€Republic€or€a€foreign€country€andÌunaware€of€that.€€As€long€as€the€consumer€knows€thatÌthere€is€a€charge€and€what€that€charge€is,€I€thinkÌthat's€the€issue€that€we€should€really€look€at€ratherÌthan€any€other€things.Ì€€€€€€€€And€second,€as€far€as€knowing€the€charges,€IÌthink€that€as€an€overall€industry,€we€have€a€globalÌeconomy,€we€have€free€access€to€phones,€just€as€if€IÌpick€up€my€phone€and€I€make€a€call€to€New€York,€well,Ìeveryone€can€say,€well,€I€don't€know€what€it€costs€toÌcall€New€York,€I€don't€know€what€it€costs€to€callÌNebraska,€but€I€can€get€that€information.€€I€can€call€myÌAT&T€operator€and€say,€you€know,€I€see€this€phone€call,ÌI€am€going€to€make€a€phone€call€to€area€code€801-421,Ìwhat€does€that€cost€me?Ì€€€€€€€€And€just€as€the€local€phone€company,€if€you€callÌfrom€Los€Angeles€to€San€Bernadino,€you€may€not€know€thatÌcharge,€and€there€is€no€regulations€as€far€as€whetherÌit's€an€information€provider€call€or€a€regular€call,€andÌreally€shouldn't€be€decided.€€It's€just€that€is€thatÌÐ	   	 ì,'2   Ðinformation€available€and€is€there€too€great€of€a€burdenÌto€put€on€every€type€of€call.Ì€€€€€€€€You€know€like,€for€example,€in€Japan,€when€youÌmake€a€phone€and€hear€some€deep€tones,€you€know€it'sÌgoing€to€be€a€toll€call.€€We€don't€do€that€in€the€UnitedÌStates,€and€there€is€obviously€going€to€be€someÌconfusion,€but€the€consumer€just€inherently€by€theÌtechnology€that's€around€is€going€to€have€to€spend€theÌtime€and€become€more€informed€before€they€pick€up€theirÌphone€to€make€a€call,€because€as€companies€and€theÌInternet€is€growing,€you€are€going€to€start€ordering€--Ìyou€may€not€buy€your€milk€from€the€local€distributor,Ìyou€may€buy€your€milk€from€New€York€and€it€may€be€flownÌin€the€next€day,€and€you€are€going€to€have€to€know€thatÌthere€is€a€potential€when€you€pick€up€your€phone€thatÌthere€are€charges€that€can€occur.Ì€€€€€€€€MS.€HARRINGTON:€€Thank€you,€Todd.Ì€€€€€€€€MR.€LESSER:€€Okay.Ì€€€€€€€€MS.€HARRINGTON:€€Mark,€do€you€have€a€question?Ì€€€€€€€€MR.€HERTZENDORF:€€Yeah,€I€was€wondering€whetherÌthe€foreign€carriers€identify€for€long€distanceÌcompanies€which€phone€numbers€are€related€to€audiotextÌor€information€services,€and€if€they€don't€currently€doÌit,€is€there€a€reason€to€think€that€they€can't€do€it€inÌthe€future?ÌÐ	   	 ì,'2   Ð€€€€€€€€MS.€HARRINGTON:€€Anyone€have€an€answer€to€thatÌquestion?€€We€have€got€a€number€of€tents€up,€but€I'dÌlike€to€try€to€get€an€answer€before€we€go€through€--Ì€€€€€€€€MR.€R.€GORDON:€€I€think€there€is€an€answer,€if€IÌmay€defer?Ì€€€€€€€€MS.€HARRINGTON:€€Sure.Ì€€€€€€€€MR.€FISCULA:€€My€name€is€Lawrence€Fiscula.€€IÌrepresent€the€Guyana€Telephone€and€Telegraph€Company€inÌSouth€America.€€We€do€provide€that€information€to€anyÌcarrier€that€requests€it€from€anywhere€in€the€world.€€WeÌcurrently€provide€it€to€AT&T€and€to€MCI.Ì€€€€€€€€MS.€HARRINGTON:€€So,€you€--Ì€€€€€€€€MS.€SCHWANKE:€€I'm€sorry.€€So,€you€know€whichÌtelephone€numbers€go€to€audiotext€services.Ì€€€€€€€€MR.€FISCULA:€€Of€course.Ì€€€€€€€€MR.€HERTZENDORF:€€Do€you€provide€thatÌinformation€to€a€carrier€on€a€--€well,€how€--Ì€€€€€€€€MR.€HILE:€€Systematically?Ì€€€€€€€€MR.€HERTZENDORF:€€Yeah,€on€a€call-by-call€basisÌor€once€a€month€you€give€them€a€list€of€specific€numbersÌor€what?Ì€€€€€€€€MR.€FISCULA:€€We€have€specific€numbers€in€ourÌaudio€plan€which€are€allocated€for€audiotext€usage.Ì€€€€€€€€MS.€HARRINGTON:€€Do€you€know€whether€otherÌcarriers€in€other€countries€similarly€have€certainÌÐ	   	 ì,'2   Ðnumbers€that€are€allocated€for€audiotext?Ì€€€€€€€€MR.€FISCULA:€€I€don't€think€I€can€--€I€can'tÌcomment€on€that.€€The€Dominican€Republic,€yes.Ì€€€€€€€€MS.€HARRINGTON:€€Dominican€Republic,€yes.Ì€€€€€€€€Anybody€know€about€Muldova?€€Why€don't€we€haveÌanywhere€here€from€Muldova?Ì€€€€€€€€MR.€KLUG:€€They€are€answering€the€phones.Ì€€€€€€€€MS.€HARRINGTON:€€Could€you€supplement€the€recordÌon€that€through€--€are€you€a€member€of€the€TSIA?Ì€€€€€€€€MR.€FISCULA:€€Yes.Ì€€€€€€€€MS.€HARRINGTON:€€Could€the€TSIA€supplement€theÌrecord€to€the€best€of€its€ability€on€the€matters€ofÌwhether€foreign€carriers€have€numbers€that€areÌdesignated€for€audiotext,€the€method€by€which€theyÌnotify€carriers€and€billing€entities€in€the€UnitedÌStates€--€the€circumstances€under€which€they€notify€themÌof€that€fact,€that€is,€whether€a€call€is€to€an€audiotextÌservice,€how€they€provide€that,€you€know,€so€on€and€soÌforth.Ì€€€€€€€€MR.€FISCULA:€€Let€me€clarify,€if€I€may.€€We€doÌnot€call€up€AT&T€and€say,€on€either€a€per-call€basis€orÌeven€a€weekly€basis,€these€numbers€are€for€audiotext.ÌWe€have€designated€numbers€in€our€numbering€plan.€€AT&TÌhas€requested€from€us€and€does€from€time€to€time,€justÌusing€them€as€one€example,€what€numbers€and€are€thereÌÐ	   	 ì,'2   Ðany€changes€in€your€numbering€plan.€€So,€that€--€that€isÌthe€extent€of€it.€€We€do€not€notify€them€--Ì€€€€€€€€MR.€HILE:€€Is€that€part€of€the€new€arrangementÌbetween€you€and€the€American€long€distance€companies€forÌthe€settlement€rates€and€so€on?Ì€€€€€€€€MR.€FISCULA:€€They€have€been€curious€about€thisÌfor€some€time.€€This€has€nothing€to€do€with€any€ofÌthat.Ì€€€€€€€€MR.€HILE:€€Can€you€supplement€the€record€on€theÌissue€of€the€settlement€procedures€between€the€foreignÌphone€company€and€the€--€and€the€American€long€distanceÌcarriers?Ì€€€€€€€€MR.€FISCULA:€€In€what€respect?Ì€€€€€€€€MR.€HILE:€€Well,€we€have€heard€that€--Ì€€€€€€€€MR.€FISCULA:€€There€are€currently€agreements€inÌplace€with€two€major€U.S.€carriers€concerningÌchargebacks,€I'm€assuming€that's€what€you're€--Ì€€€€€€€€MR.€HILE:€€Yes,€that's€the€issue.Ì€€€€€€€€MR.€FISCULA:€€--€Where€if€--€and€AT&T,€we€willÌjust€use€them€as€an€example€again€--€subscriber€--Ì€€€€€€€€MS.€HARRINGTON:€€Would€you€use€your€microphoneÌis€everyone€can€hear€you?€€Thank€you.Ì€€€€€€€€MR.€FISCULA:€€Better?€€Is€that€better?Ì€€€€€€€€If€an€AT&T€customer€is€given€a€credit,€it€isÌtotally€at€the€discretion€of€the€U.S.€carrier.€€I€haveÌÐ	   	 ì,'2   Ðnothing€to€do€with€that.€€AT&T€in€that€example€will€notÌsettle€with€Guyana€for€the€--€whether€it's€a€five-minuteÌcall€or€a€three-minute€call€in€that€particular€instance,ÌI€receive€zero€settlement.€€I€in€turn€make€no€settlementÌwith€my€service€bureau€or€information€provider€for€thatÌparticular€call.Ì€€€€€€€€MR.€HILE:€€And€that's€the€end€of€it,€or€does€itÌgo€further?€€Is€there€more€--€is€there€some€additionalÌprocess?Ì€€€€€€€€MR.€FISCULA:€€The€--€the€--€in€this€business,€weÌhave€found€internationally,€the€best€way€to€solve€aÌproblem€is€simple€nonpayment€for€the€service,€whetherÌit's€where€people€use€the€word€"free"€in€advertising€orÌif€it's€a€type€of€service€that€doesn't€work.€€If€theyÌaren't€paid,€they€won't€do€it€again.Ì€€€€€€€€MR.€HERTZENDORF:€€Has€Guyana€Telephone€been€inÌcommunication€with€the€group€of€European€regulators€toÌimplement€similar€procedures,€and€is€--€is€anyoneÌpresent€a€member€--€the€abbreviation€is€ITU,ÌInternational€Telephone€--€I€think€it's€InternationalÌTelephone€--Ì€€€€€€€€MR.€FISCULA:€€Telecommunications€Union,€of€whichÌwe€are€a€member.€€We€are€also€a€member€of€theÌassociations€NSTIA€and€the€ITA,€and€we€do€work€throughÌour€associations€more€often€than€directly.ÌÐ	   	 ì,'2   Ð€€€€€€€€MS.€HARRINGTON:€€All€right,€we€are€going€to€moveÌto€the€last€issue€here€concerning€the€industry€view€thatÌif€there€were€a€change€made€in€the€notice€in€the€billingÌstatement,€that€that€might€have€an€impact€onÌchargebacks.€€We€would€like€to€discuss€that€issue€forÌour€remaining€time€this€morning.Ì€€€€€€€€Richard,€do€you€have€your€card€up?Ì€€€€€€€€MR.€R.€GORDON:€€Yes,€I€do.Ì€€€€€€€€MS.€HARRINGTON:€€Okay.Ì€€€€€€€€MR.€R.€GORDON:€€We€very€much,€as€the€TSIA,Ìsupport€and€endorse€and€would€like€to€actually€plead€forÌa€change€in€the€wording,€and€again,€I€believe€that€thisÌis€consistent€with€the€intent€of€Congress.Ì€€€€€€€€It's€important€to€note€that€really€what€we'reÌdealing€with€is€a€commercial€exchange,€whether€it'sÌbilled€through€the€phone€company€or€it's€billed€throughÌa€third-party€billing€company.€€The€present€state€ofÌaffairs€is€such€that€we€as€an€industry€do€not€haveÌsufficient€information€about€the€consumer€with€which€weÌcan€make€an€informed€decision€and€make€sure€that€theyÌknow€what€they€are€doing.Ì€€€€€€€€Consequently,€when€there€is€a€statement€on€aÌbilling€record€or€on€a€bill€that's€received€by€theÌconsumer€that€basically€says,€you€don't€have€to€pay€thisÌand€if€you€don't€pay€it,€nothing€is€going€to€happen€--ÌÐ	   	 ì,'2   Ðand€I€know€that€that's€extracting€something€out€of€it€--Ìwhat€happens€is€the€information€provider,€the€providerÌof€the€services,€does€have,€under€the€law,€a€commercialÌright€to€go€after€the€person€who€used€those€services€andÌhas€the€right€to€pursue€collection.Ì€€€€€€€€Unfortunately,€the€billing€notice,€as€it€is€mostÌfrequently€presented€to€the€public,€gives€the€public€theÌfalse€impression€that€when€the€phone€company€says,€I'mÌtaking€that€off€your€bill,€that€the€phone€company€hasÌfinal€authority.€€That€is€not€the€case.€€The€phoneÌcompany€is€only€the€agent€for€the€provider€of€theÌservices€here,€and€as€we€have€heard€this€morning,€theÌphone€companies,€the€LECs,€believe€that€they€purchaseÌthe€accounts€receivable,€and€they€then€have€the€right€toÌcollect€that€money.Ì€€€€€€€€I€think€as€an€industry€we€would€say€that€theyÌborrow€the€accounts€receivable.€€They€don't€purchaseÌthem,€because€if€there€is€a€denial€of€the€record,€ifÌthere€is€a€denial€of€the€transaction,€then€the€LECs,€whoÌwill€not€assume€that€debt€and€probably€shouldn't,Ìbecause€they€were€not€really€a€party€to€the€actualÌtransaction,€they€simply€are€a€party€to€the€billing€sideÌhere,€they€have€to€be€able€to€give€back€to€the€industryÌsufficient€data€that€the€industry€can€then€go€and€onÌcommercial€terms€with€full€disclosure€to€the€customerÌÐ	   	 ì,'2   Ðadvise€the€customer€that€they€have€consumed€theseÌservices,€they€have€a€requirement€to€pay€for€them,€andÌwe€need€to€let€the€public€know€consistently€that€if€youÌuse€the€telephone€as€a€vehicle€to€commit€electronicÌcommerce,€that€doesn't€give€you€the€right€to€steal,€andÌthat's€the€problem.Ì€€€€€€€€The€public€notice€is€such€that€consumers€areÌbecoming€educated€that€they€can€put€their€hand€in€theÌcookie€jar€and€keep€taking€the€cookies€and€never€have€toÌpay€for€them.Ì€€€€€€€€MS.€HARRINGTON:€€Susan?Ì€€€€€€€€MS.€GRANT:€€Let€me€--Ì€€€€€€€€MS.€HARRINGTON:€€Before€you€speak,€let€me€ask€aÌquestion.€€Does€everyone€--€we€had€circulated€a€copy€ofÌthe€ISA€proposed€alternative€language€here€for€the€rule,Ìand€I€hope€that€all€the€participants€have€that,€becauseÌwe€are€going€to€talk€about€that€in€a€minute.€€We€haveÌmore€copies€if€you€don't€have€them.€€The€ISA,€forÌexample,€needs€a€copy.Ì€€€€€€€€MR.€ANGEL:€€We€have€got€comments€on€page€8€--Ì€€€€€€€€MR.€KLUG:€€Marianne,€are€there€extras?Ì€€€€€€€€MS.€SCHWANKE:€€Yes.Ì€€€€€€€€MS.€GRANT:€€I€don't€know€if€more€documentationÌcan€be€provided€than€has€been€provided€in€the€commentsÌso€far€about€the€different€categories€of€consumers€whoÌÐ	   	 ì,'2   Ðdispute€bills€and€how€many€of€them€are€really€takingÌadvantage€and€how€many€of€them€have€really€been€takenÌadvantage€of.€€I€do€know€that€--€and€I€would€welcomeÌthat€information€if€more€data€could€be€provided.Ì€€€€€€€€I€do€know€that€in€the€calls€that€the€NationalÌFraud€Information€Center€gets,€people€are€alarmed€aboutÌthe€possibility€of€their€phone€service€being€shut€off,Ìeven€though€the€bill€says€that€it€cannot€be,€and€theyÌneed€to€be€re-assured,€in€fact,€by€our€counselors€thatÌthey€do€have€the€right€to€dispute€the€charges€withoutÌfear€that€their€phone€service€is€shut€off.Ì€€€€€€€€I€sympathize€with€the€IP's€desire€to€get€paidÌfor€legitimate€charges€that€have€been€wrapped€up€byÌconsumers€who€really€understood€what€they€were€gettingÌand€how€much€it€would€cost€and€are€refusing€to€pay.€€IÌdon't€know€what€percentage€of€the€chargebacks€and€theÌdisputed€bills€that€represents,€but€I€think€that€if€theÌbilling€notice€was€to€make€clearer€to€consumers€the€timeÌwithin€--€within€which€they€must€dispute€the€charges,Ìwhich€I€don't€have€any€problem€with,€and€the€fact€thatÌwhile€their€phone€service€could€be€turned€off,€theyÌmight€still€be€held€responsible€for€those€charges,€IÌthink€it€would€be€important€to€also€tell€them€that€theyÌhave€the€continued€right€to€defend€themselves€againstÌthose€charges.ÌÐ	   	 ì,'2   Ð€€€€€€€€If€the€company€wishes€to€take€that€collectionÌaction€against€them,€that€they€have€the€right,€as€theyÌdo€in€any€other€kind€of€situation€where€they€areÌdisputing€the€validity€of€the€charges,€to€continue€toÌcontest€them.Ì€€€€€€€€I'm€really€concerned€about€any€notice€on€theÌbill€that€would€further€alarm€consumers€into€believingÌthat€they€don't€have€the€continued€right€to€disputeÌthese€charges,€because€from€the€calls€we€get,€peopleÌneed€to€be€re-assured€that,€in€fact,€they€can€continueÌto€argue€about€it.Ì€€€€€€€€MS.€HARRINGTON:€€Okay,€so,€looking€at€this€ISAÌproposal€in€paragraph€2€at€the€end€of€the€secondÌsentence,€you€would€add€some€sort€of€phrase€that€says,Ì"and€you€have€the€right€to€continue€to€dispute€them"?Ì€€€€€€€€MS.€GRANT:€€Right.Ì€€€€€€€€MS.€HARRINGTON:€€That€would€--€okay,€Dave?Ì€€€€€€€€MR.€GILLIS:€€In€reviewing€the€proposal,€and€IÌguess€at€this€point€in€the€interest€of€completeÌdisclosure,€I€should€make€the€comment€that€the€views€IÌexpress€are€my€own€and€don't€represent€the€formalÌposition€of€the€National€Association€of€AttorneysÌGeneral,€but€in€reviewing€the€disclosure€provision€thatÌwas€enclosed,€it€would€be€my€view€that€people€shouldÌknow€what€their€rights€and€obligations€are.€€So,€I€--ÌÐ	   	 ì,'2   Ðand€to€the€extent€that€this€would€help€with€chargebacks,ÌI€think€it€would€be€a€good€approach.€€I€think€there€areÌsome€potential€problems.Ì€€€€€€€€One,€if€you€give€people€too€much€information,€itÌwill€dilute€the€effectiveness€of€the€communication,€andÌit€--€so,€it€has€to€be€important€that€the€notice€isÌconcise.Ì€€€€€€€€Secondly,€I€share€the€concern€that€SusanÌexpressed€about€the€use€of€the€notice€by€--€either€as€itÌstands€alone€or€by€collection€agents€to€imply€thatÌdisconnection€will€occur€as€a€result€of€nonpayment€forÌthese€charges.€€And€so€I€would€offer€those€points€andÌsuggest€that€the€formulation€of€the€notice€ought€to€beÌone€that's€carefully€studied€consistent€with€what€peopleÌtake€away€from€the€communication.Ì€€€€€€€€MS.€HARRINGTON:€€Allen?Ì€€€€€€€€MR.€HILE:€€I'm€referring€specifically€to€theÌISA,€and€I€have€one€rather€narrow€question,€and€that€isÌthe€first€--€the€first€paragraph,€the€first€thing€that'sÌin€bold€and€italics,€which€are€noncommunicationÌservices,€and€I€wonder€if€anybody€has€a€view€on€whatÌmeaning€consumers€might€take€from€that€particularÌphrase.€€The€proposal€is,€"This€bill€contains€chargesÌfor€calls€from€your€phone€to€900€numbers€that€provideÌinformation€and/or€entertainment€which€areÌÐ	   	 ì,'2   Ðnoncommunication€services."Ì€€€€€€€€MS.€HARRINGTON:€€Albe?Ì€€€€€€€€MR.€ANGEL:€€I€believe€the€term€refers€to€theÌterm€of€art€that€the€FCC€has€used€in€categorizingÌdifferent€charges,€and€--Ì€€€€€€€€MS.€HARRINGTON:€€Use€your€microphone,€please.Ì€€€€€€€€MR.€ANGEL:€€--€and€noncommunication€services€areÌthose€like€900€that€generally€are€unregulated,€whileÌappearing€on€telephone€company€bills,€will€not€result€inÌa€disconnection€of€basic€service€for€nonpayment.Ì€€€€€€€€MS.€HARRINGTON:€€Why€was€that€--€why€should€thisÌinformation€be€given€to€consumers?€€What€difference€doesÌthat€make?€€I€mean,€why€would€anybody€care?Ì€€€€€€€€MR.€ANGEL:€€We€struggled€with€the€choice€of€theÌright€words€trying€to€strike€the€right€balance€in€termsÌof€what€consumers€would€understand€and€at€the€same€timeÌinvoking€the€right€principles€from€a€regulatoryÌstandpoint.Ì€€€€€€€€Now,€all€of€you€may€recall€that,€you€know,€theÌmodified€final€judgment,€Judge€Green€used€one€set€ofÌterms€and€the€FCC€used€yet€another€set€of€terms.€€We'reÌcontent€to€change€that€language€to€something€thatÌconsumers€understand€consistent€with€the€regulatoryÌenvironment.Ì€€€€€€€€MS.€HARRINGTON:€€Kim€would€--ÌÐ	   	 ì,'2   Ð€€€€€€€€MR.€ANGEL:€€I€believe€Ed€LaVergne,€who€is€ourÌcounsel,€just€wants€to€make€a€point.€€Would€that€be€allÌright?Ì€€€€€€€€MS.€HARRINGTON:€€Okay.Ì€€€€€€€€MR.€LAVERGNE:€€Ed€LaVergne,€counsel€to€the€ISA,Ìa€very€brief€point.€€The€wording€was€specifically€chosenÌbecause€it€is€precisely€what€the€Âé¶¹´«Ã½€CommunicationsÌCommission€currently€requires€in€billing€statements,€andÌthat's€--€and€the€precise€section€is€47€CFR€64.1510Ì(A)(2)(i)(a).Ì€€€€€€€€MS.€HARRINGTON:€€I€wonder€if€anyone€has€everÌcopy-tested€to€fine€out€if€consumers€understand€any€ofÌthis.€€That's€an€inappropriate€editorial€aside.Ì€€€€€€€€All€right,€we€are€going€to€hear€from€Kim€andÌthen€Richard.Ì€€€€€€€€MS.€WILLIAMS:€€I€just€wanted€to€comment€on€theÌstatement,€too,€that€our€statement€is€very€similar€toÌthis,€and€the€noncommunications€piece€is€in€ours€becauseÌthe€FCC€directed€it.€€I€think€our€concern€at€the€timeÌthat€we€had€to€put€this€statement€out€there,€also,€wasÌwhy€don't€we€just€tell€consumers€not€to€pay€it€then,Ìdon't€even€send€us€the€check,€we€will€just€mail€you€yourÌcharges€back€as€soon€as€you're€ready,€but€really,€900Ìchargebacks€have€gone€down,€but€is€that€--€since€theÌTDDRA.€€I€don't€know€if€that's€a€function€of€any€ofÌÐ	   	 ì,'2   Ðthis.Ì€€€€€€€€I€think€it's€a€function€of€the€fact€that€most€ofÌthe€services€that€consumers€complained€about€left€900Ìand€moved€on€to€other€things.€€The€statement€helpsÌconsumers€understand€their€rights.€€Whether€it's€wordedÌthe€best€or€not€is€another€thing.€€I€think€we€all€took€aÌshot€at€wording€it€ourselves€and€Southwestern€Bell's€isÌprobably€not€identical€to€any€other€LEC's,€but€it€hasÌthe€pieces€in€it€that€the€FCC€required.Ì€€€€€€€€MS.€HARRINGTON:€€Richard?Ì€€€€€€€€MR.€R.€GORDON:€€Yes,€again,€I€would€like€to€tryÌto€bring€us€back€to€the€fact€that€we're€here€todayÌtrying€to€work€together€to€come€up€with€changes€orÌmodifications€to€the€regulation€that€reflect€the€intentÌof€Congress,€and€the€intent€of€Congress,€I€think,€wasÌvery€clearly€established€in€a€communique€dated€FebruaryÌ18th,€1997€to€the€Chairman€of€the€Âé¶¹´«Ã½€TradeÌCommission,€authored€by€Congressman€Gordon,€in€which€heÌspecifically€offered€the€following€language€to€beÌprinted€on€a€separate€page€of€a€consumer's€phone€bill:Ì€€€€€€€€"This€bill€contains€call€--€charges€for€callsÌfrom€your€phone€to€900€numbers€that€provide€informationÌand/or€entertainment€services.€€If€you€wish€to€disputeÌany€specific€900€charges€that€appear€on€this€bill,€youÌmust€call€the€number€at€the€bottom€of€your€itemized€callÌÐ	   	 ì,'2   Ðpage€within€60€days;€otherwise,€the€charges€will€beÌpresumed€to€be€valid.€€Neither€your€local€nor€longÌdistance€service€will€be€disconnected€if€you€do€not€payÌthe€disputed€charges.€€Even€if€the€disputed€charges€areÌremoved€from€your€bill,€the€900€service€provider€has€theÌright€to€pursue€the€collection€of€these€disputedÌcharges.€€Your€failure€to€pay€undisputed€charges€timelyÌmay€be€reported€under€the€Consumer€Credit€Reporting€ActÌto€a€third-party€credit€reporting€agency,€which€mayÌadversely€affect€your€credit.€€You€can€call€your€localÌtelephone€company€to€have€900€calls€blocked€from€yourÌline."Ì€€€€€€€€We're€here€to€interpret€the€intent€of€Congress.Ì€€€€€€€€MS.€HARRINGTON:€€Well,€I€have€to€dispute€that.ÌThe€Commission€interpreted€the€intent€of€Congress€whenÌit€promulgated€the€rule,€and€we€are€here€to€review€theÌrule.Ì€€€€€€€€MR.€R.€GORDON:€€Sorry.Ì€€€€€€€€MS.€HARRINGTON:€€Just€--€and€that's€an€importantÌpoint,€I€think.Ì€€€€€€€€Let€me€ask€a€question.€€The€Commission€in€theÌfirst€--€when€it€promulgated€this€rule€indicated€itsÌpreference€to€avoid€overly€prescriptive€regulation€hereÌby€in€most€instances€opting€not€to€require€that€specificÌlanguage€be€used€in€disclosures,€so€that€in€theÌÐ	   	 ì,'2   Ðadvertising€portions,€for€the€most€part,€the€ruleÌrequires€clear€and€conspicuous€disclosures€of€certainÌpieces€of€information€rather€than€requiring€thatÌdisclosures€in€advertisements€be€scripted€in€a€specificÌway.Ì€€€€€€€€Likewise,€even€where€the€rule€requires€theÌdisclosure€of€information€about€odds€of€winning€inÌsweepstakes,€we€stayed€away€from,€you€know,€specificÌlanguage.€€This€would€be€--€to€adopt€this€approach€--€aÌcomplete€departure€from€the€Commission's€general€policyÌof€leaving€it€to€industry€to€decide€how€to€provideÌcertain€information.€€As€long€as€it's€there,€we€are€notÌgoing€to,€in€other€words,€get€into€the€business€ofÌwriting€disclosures€in€the€rules.Ì€€€€€€€€What€the€ISA€is€proposing€here€is€a€completeÌabout-face,€essentially.€€It's€quite€restrictive€andÌregulatory,€and€I'm€wondering€if€anyone€has€givenÌthought€to€the€implications€of€that.Ì€€€€€€€€Richard?Ì€€€€€€€€MR.€R.€GORDON:€€We€have,€and€in€support€of€whatÌPeter€has€said,€when€you€have€someone€such€as€hisÌcompany,€which€has€one€national€program€going€out€in€600Ìnewspapers,€and€you€have€such€vast€inconsistency€in€theÌchargeback€rates€and€in€the€--€and€in€the€collection,Ìthe€only€thing€that€you€can€conclude€from€that€is€thatÌÐ	   	 ì,'2   Ðthere's€inconsistency€in€the€communication€at€the€LECÌlevel.Ì€€€€€€€€That€appears€to€be€the€major€problem€that€weÌhave,€and€if€--€if€it€starts€on€the€billing€statement,Ìif€the€billing€statement€is€consistent,€then€hopefullyÌthe€customer€service€representatives€at€the€LECs€willÌconsistently€say€the€same€things€and€consistently€applyÌthe€same€standards.Ì€€€€€€€€And€further,€when€these€do€become€third-partyÌcollection€or€secondary€collection€efforts,€hopefully,Ìif€the€attorney€generals€are€all€properly€advised€as€toÌwhat€the€federal€standard€is,€then€their€local€officesÌwill€apply€the€same€standards€when€dealing€withÌconsumers€that€are€complaining€about€collectionÌefforts.Ì€€€€€€€€MS.€HARRINGTON:€€Adam,€do€you€have€a€question?Ì€€€€€€€€MR.€COHN:€€I€had€a€question€about€--Ìspecifically€about€this€billing€statement€that€the€ISAÌprovided,€if€you€want€to€go€on€to€other€--Ì€€€€€€€€MS.€HARRINGTON:€€Okay,€I€am€going€to€come€backÌto€that.Ì€€€€€€€€Linda?Ì€€€€€€€€MS.€GOLDSTEIN:€€I€was€just€going€to€try€toÌaddress€that€comment€and€perhaps€give€the€CommissionÌsome€comfort€level€that€in€adopting€this€language€itÌÐ	   	 ì,'2   Ðwould€not€really€be€acting€inconsistent€with€theÌreasoned€and€flexible€approach€it€took€on€theÌadvertising€disclosures.€€I€think€you€are€talking€aboutÌtwo€different€animals.Ì€€€€€€€€The€reason€the€industry€advocated€so€stronglyÌfor€some€flexibility€in€terms€of€the€advertisingÌdisclosures€is€because€of€the€multitude€of€forms,Ìvariations,€formats,€styles,€presentations€that€theÌadvertising€might€take€and€the€hundreds€of€thousands€ofÌdifferent€advertisers€that€might€be€subject€to€thoseÌregulations,€and€we€felt,€as€is€consistent€with€generalÌFTC€policy,€that€always€the€advertising€and€the€adequacyÌof€the€disclosure€should€be€viewed€within€the€context€ofÌthe€totality€of€the€ad€based€on€the€net€impression,Ìbased€on€all€the€graphic€materials,€where€the€disclosureÌappears€in€relation€to€other€information€on€the€piece,Ìwhat€the€other€graphics€copy€and€text€are.Ì€€€€€€€€Here,€we're€dealing€with€a€document€which€by€itsÌnature€is€a€disclosure€document.€€So,€you€really€don'tÌhave€the€need€or€the€driving€force€or€the€creativeÌflexibility€really€doesn't€exist€in€the€context€of€thisÌdocument€to€the€same€extent€as€it€does€in€connectionÌwith€advertising.Ì€€€€€€€€MS.€HARRINGTON:€€All€right,€I€want€to€check€andÌsee€whether€there€is€consensus€around€the€table€on€theÌÐ	   	 ì,'2   Ðquestion€of€whether€it€would€be€preferable€to€have€aÌboilerplate€disclosure€in€the€billing€statement€ratherÌthan€--€and€to€require€that€by€regulation.Ì€€€€€€€€Susan?Ì€€€€€€€€MS.€GRANT:€€I€would€support€it€as€long€as€itÌstrongly€voiced€the€consumers'€rights€as€it€does€theÌcompany's€rights.€€I€think€that€the€reason€why€we€haveÌthe€preamble€requirements€and€other€protections€of€theÌrule€stemmed€from€the€instant€nature€of€the€charges€andÌthe€fact€that€it's€often€something€that's€billed€on€theÌconsumer's€telephone€bill,€a€very€basic€consumerÌservice.€€So,€I€would€really€support€a€concise,€strongÌnotice€that€gave€consumers€as€much€information€aboutÌtheir€own€rights€as€their€obligations€to€the€companies.Ì€€€€€€€€MS.€HARRINGTON:€€Does€anyone€disagree€with€whatÌSusan€just€said?€€Put€your€tents€down€for€a€minute,Ìplease,€because€I€really€can't€--€does€anyone€disagreeÌwith€what€Susan€Grant€just€said?Ì€€€€€€€€You€disagree€with€her?Ì€€€€€€€€MR.€R.€GORDON:€€No,€I€don't€disagree.Ì€€€€€€€€MS.€HARRINGTON:€€Okay,€well,€then€you€can't€talkÌright€now.Ì€€€€€€€€All€right,€now,€everyone€who€had€their€tents€upÌmay€put€them€back€up.€€We€have€only€a€few€minutes€left.ÌAdam,€a€question?ÌÐ	   	 ì,'2   Ð€€€€€€€€MR.€COHN:€€I€had€a€question€specifically€aboutÌISA's€proposal,€which€is€very€similar€to€the€--€to€theÌone€that€was€just€read€earlier.€€I€think€that€was€--€wasÌthat€also€Bart€Gordon's€--Ì€€€€€€€€MR.€R.€GORDON:€€That€was€right€out€of€hisÌletter,€yes.Ì€€€€€€€€MR.€COHN:€€There€is€a€statement€in€the€secondÌparagraph€that€says,€"Also,€if€you€do€not€pay€legitimateÌcharges,€your€ability€to€pay€noncommunication€servicesÌand€to€make€900€calls€may€be€blocked."Ì€€€€€€€€How€does€--€how€are€legitimate€charges€defined?ÌWhat€does€that€mean?Ì€€€€€€€€MR.€R.€GORDON:€€Legitimate€charges€are€chargesÌthat€actually€occurred€from€that€telephone.€€So,€ifÌthere€are€situations,€as€there€have€been€in€the€past€andÌthere€may€be€in€the€future,€where€somebody€does€--€aÌphrase€I€hadn't€heard€before€until€today€--€phantomÌbilling,€if€somebody€really€does€phantom€billing,€thenÌthe€consumer€absolutely€can't€be€held€responsible€forÌthose.€€That's€the€intent€here.Ì€€€€€€€€MR.€COHN:€€What€about€other€complaints€that€aÌconsumer€may€have,€where€they€would€claim€that€it€wasÌnot€legitimate,€even€though€it€was€placed€from€theirÌphone,€false€advertising,€for€instance?Ì€€€€€€€€MR.€R.€GORDON:€€Again,€at€that€point€in€time,ÌÐ	   	 ì,'2   Ðthat€becomes€an€issue€between€the€service€provider€andÌthe€consumer,€and€that€can€be€resolved€using€standardÌcommercial€terms.Ì€€€€€€€€MS.€HARRINGTON:€€Okay,€we€are€going€to€haveÌKim.Ì€€€€€€€€MS.€WILLIAMS:€€Yes,€I€guess€my€only€statementÌabout€the€message€on€the€bill€is€that€it€shouldn't€beÌmandated€other€than€certain€key€points€and€all€of€theÌkey€points,€such€as€that€it's€--€you€know,€theÌlegitimate€charges€statement€you€just€asked€about,Ìthat's€in€the€FCC's€requirement€already.€€As€long€as€weÌall€have€those€things€in€our€message€to€the€customer,ÌI'm€not€sure€why€a€specific€statement€has€to€be€used.Ì€€€€€€€€MS.€HARRINGTON:€€Okay,€Albe€and€then€Jill.Ì€€€€€€€€MR.€ANGEL:€€Just€for€clarification,€I€want€toÌpoint€out€that€what€we€have€done€here€is€we€have€takenÌthe€FTC's€existing€billing€notice€in€the€regs,€we€haveÌproposed€some€changes.€€The€changes€that€we€areÌproposing€are€in€bold€italic,€and€our€proposal€--Ì€€€€€€€€MS.€HARRINGTON:€€So,€this€would€still€be€aÌsample?Ì€€€€€€€€MR.€ANGEL:€€Yes,€and€it's€a€sample.Ì€€€€€€€€MS.€HARRINGTON:€€Fine,€that's€an€importantÌclarification.Ì€€€€€€€€MR.€ANGEL:€€Yes,€and€I€think€there€is€a€greatÌÐ	   	 ì,'2   Ðdegree€of€uniformity€can€be€achieved€by€just€putting€onÌadditional€sample€that€people€can€feel€they€have€a€safeÌharbor€by€using.Ì€€€€€€€€MS.€HARRINGTON:€€So,€we€are€not€talking€aboutÌchanging€the€rule€but€about€the€sample€language.ÌImportant€clarification.Ì€€€€€€€€MR.€ANGEL:€€Correct.Ì€€€€€€€€MS.€HARRINGTON:€€Jill?Ì€€€€€€€€MS.€SANDFORD:€€In€taking€a€look€at€this€languageÌhere,€I€agree€with€Susan€to€the€extent€that€we€do€wantÌsomething€that's€consistent€and€balanced,€but€two€issuesÌcome€to€mind.€€The€first,€this€fails€to€distinguishÌbetween€authorized€and€unauthorized€calls,€and€I€thinkÌit's€important€to€have€in€the€language€something€thatÌreferences€a€call€being€authorized€by€the€consumerÌbefore€the€consumer€is€billed.Ì€€€€€€€€Another€concern€I€have€is€this€italic€language,Ì"No€later€than€60€days€after€we€send€you€the€first€billÌon€which€the€disputed€charges€appeared."€€We€areÌstarting€to€see€a€number€of€consumer€complaints€whereÌconsumers€are€enrolled€in€memberships€on€a€recurringÌbasis.Ì€€€€€€€€Now,€if€you€had€a€situation€where€the€consumerÌwas€enrolled€in€the€Psychic€Hotline€and€the€consumerÌmissed€the€first€month's€charge,€would€they€then€waiveÌÐ	   	 ì,'2   Ðtheir€right€two€or€three€months€later€to€object€to€thoseÌcharges€because€they€didn't€object€initially€to€being€aÌmember€of€the€club?Ì€€€€€€€€MS.€HARRINGTON:€€Okay,€Marianne€has€a€question.Ì€€€€€€€€MS.€SCHWANKE:€€Actually,€I€have€a€question€and€aÌfollow-up€clarification.€€I€just€want€to€clarify€thatÌISA€in€its€comment,€I€believe,€proposed€changes€to€theÌrule€and€in€addition€provided€this€as€a€sample€billingÌnotice€that€would€comply€with€the€changes€it€proposed.ÌIs€that€correct?Ì€€€€€€€€MR.€ANGEL:€€I€have€to€check.Ì€€€€€€€€MS.€SCHWANKE:€€I€see€heads€shaking€behind€you.Ì€€€€€€€€MS.€HARRINGTON:€€Ed€LaVergne,€your€counsel,€saysÌyes.€€I'll€note€that€for€the€record.Ì€€€€€€€€MR.€ANGEL:€€Yes.Ì€€€€€€€€MS.€SCHWANKE:€€Okay,€and€then€I€wanted€to€followÌup€something€that€Richard€said€about€legitimateÌcharges.€€You€indicated€legitimate€charges€would€includeÌall€calls€made€from€a€phone€bill,€but€it€would€notÌinclude€what€we€have€referred€to€as€phantom€calls,€butÌthe€whole€issue€about€phantom€calls€is€that€it€appearsÌon€a€bill€as€though€it's€a€call€that€was€made€from€theÌconsumer's€house€and€the€consumer€is€disputing€thatÌfact.€€So,€how€would€that€play€into€this€issue€of€whatÌis€a€legitimate€charge?ÌÐ	   	 ì,'2   Ð€€€€€€€€MS.€HARRINGTON:€€Don?€€You€have€your€tent€up.Ì€€€€€€€€MR.€KLUG:€€Yes,€you€were€asking€earlier€aboutÌlooking€for€consensus€on€the€requirement€for€uniformÌlanguage€as€opposed€to€each€billing€entity€to€provideÌtheir€own.€€I€strongly€support€uniform€language.€€IÌthink€it€strengthens€the€intent€of€the€notice€as€well€asÌjust€the€--€just€helps€the€industry.Ì€€€€€€€€MS.€HARRINGTON:€€Does€a€safe€harbor€example€notÌprovide€adequate€uniformity?Ì€€€€€€€€MR.€KLUG:€€No.Ì€€€€€€€€MS.€HARRINGTON:€€Well,€why€not?Ì€€€€€€€€MR.€R.€GORDON:€€I€have€a€--€because,€Eileen,€ifÌI€may,€the€current€regulations€say€60€days,€and€there€isÌinterpretations€of€what€that€means.€€I€think€if€we€leaveÌthis€to€the€LECs€to€interpret€the€sample,€then€we€getÌback€to€the€matter€of€inconsistency.Ì€€€€€€€€MS.€HARRINGTON:€€We€are€going€to€hear€from€MarkÌwith€a€quick€question,€we€are€going€to€hear€from€Albe,Ìand€then€we€are€done.Ì€€€€€€€€MR.€HERTZENDORF:€€With€regard€to€theÌparticipants€who€are€recommending€uniform€language,€canÌthey€create€some€particular€billing€statement€that€wasÌused€by€some€particular€LEC€which€they€thoughtÌdiscouraged€consumers€from€paying?€€I€mean,€one€thatÌstood€out€as€being€particularly€bad€from€the€IP's€pointÌÐ	   	 ì,'2   Ðof€view?Ì€€€€€€€€MS.€HARRINGTON:€€Albe?Ì€€€€€€€€MR.€ANGEL:€€In€response€to€your€question,€Mark,ÌI€know€that€anecdotal€examples,€such€as€the€one€thatÌPeter€Brennan€plans€on€following€through€with,€willÌprovide€some€of€the€granular€information€that€we'reÌlooking€for.€€In€response€to€the€earlier€question€as€toÌwhether€or€not€we're€proposing€a€rule€change€in€additionÌto€that€change€sample,€at€page€7€of€your€comments,€inÌbold€once€again,€we€are€articulating€what€the€change€inÌthe€rules€should€be,€and€it€does€go€to€the€issue€of€whenÌa€customer€may€initiate€a€billing€review.Ì€€€€€€€€MS.€HARRINGTON:€€Okay.Ì€€€€€€€€MR.€ANGEL:€€And€it's€just€that€last€segment€ofÌthe€first€paragraph.Ì€€€€€€€€MS.€HARRINGTON:€€Okay,€Marianne€has€a€questionÌout€that€hasn't€been€responded€to.€€Does€anyone€haveÌanything€that€is€responsive€to€Marianne's€question?Ì€€€€€€€€Richard,€your€sign€--€your€--€do€you€haveÌsomething?Ì€€€€€€€€MR.€R.€GORDON:€€Well,€I€had€a€comment,€but€--Ì€€€€€€€€MS.€HARRINGTON:€€Okay,€but€your€sign€is€sort€ofÌperpetually€up,€and€that's€--€and€everyone€has€an€equalÌstake,€but€we€can't€have€perpetually€up€signs€here.Ì€€€€€€€€Thank€you,€Mark.€€See,€it€applies€to€the€gooseÌÐ	   	 ì,'2   Ðand€the€gander.Ì€€€€€€€€Marianne,€what's€your€question€again?Ì€€€€€€€€MS.€SCHWANKE:€€My€question€is€how€do€--€there€isÌa€statement€on€the€bill€that€indicates€that€allÌlegitimate€charges€have€to€be€paid.€€How€does€theÌphantom€bill€fit€into€that€statement?€€Is€that€a€--Ìwould€that€be€considered€a€legitimate€charge?Ì€€€€€€€€MS.€HARRINGTON:€€Jon?Ì€€€€€€€€MR.€SHAUB:€€I€think€we€need€to€have€a€clearÌunderstanding€of€what€is€meant€by€"phantom€bill,"Ìbecause€I€think,€back€to€Jill's€point,€we€need€toÌdistinguish€authorized€from€unauthorized€in€theÌdefinition€of€phantom€bill.€€The€customer€may€have€saidÌI€didn't€make€that€call,€but,€in€fact,€the€call€may€haveÌcome€from€that€line€without€the€customer's€knowledge,Ìwhereas€I€think€a€phantom€call€is€being€discussed€as€aÌcall€never€took€place.Ì€€€€€€€€MS.€HARRINGTON:€€We€are€going€to€have€moreÌdiscussion€this€afternoon€on€phantom€billing,€as€well.ÌThank€you,€Jon.Ì€€€€€€€€Okay,€Albe,€and€then€--€this€is€the€lastÌcomment.Ì€€€€€€€€MR.€ANGEL:€€It's€just€to€augment€what€you€justÌsaid.€€The€billing€code€reasons€that€are€given€by€a€LECÌfor€a€chargeback€is€what€we're€also€seeking€for€someÌÐ	   	 ì,'2   Ðuniformity.€€A€phantom€bill€would€not€be€a€legitimateÌcharge€in€that€there€would€be€an€investigation€launchedÌto€determine€that€there€was€fraud.Ì€€€€€€€€MS.€HARRINGTON:€€Thank€you,€Albe.Ì€€€€€€€€Thank€you,€everyone,€for€being€patient€with€ourÌprocess,€and€this€has€been€a€very€rich€and€wonderfulÌdiscussion€this€morning.€€Thank€all€of€you.Ì€€€€€€€€We€will€resume€promptly€at€1:30,€and€let€me€tellÌyou,€we€have€got€a€new€food€vendor€up€at€the€fabulousÌTop€of€the€Trade.€€We€don't€get€any€money€here€from€it.ÌThere€is€no€kick-back,€but€if€you€need€a€quick€bite,€goÌup€to€the€7th€floor.Ì€€€€€€€€òò(Whereupon,€at€12:30€p.m.,€a€lunch€recessÐ   	 œÀ   Ðwas€taken.)ÌÐ	   	 ¼à   Ð€€€€€€€€€€€€€€€€€€€€AFTERNOON€SESSIONÌ€€€€€€€€€€€€€€€€€€€€€€€€€€€€(1:30€p.m.)Ìóó€€€€€€€€MS.€HARRINGTON:€€Thank€you,€everyone.€€I€hopeÐ   	 ü    Ðyou€had€just€a€wonderful,€leisurely€lunch.Ì€€€€€€€€We€are€going€--€we€are€going€to€continue€talkingÌabout€this€billing€and€collection€issue,€but€now€we€wantÌto€talk€about€issues€that€have€been€raised€from€theÌconsumer€perspective,€and€we€touched€on€one€of€theseÌthis€morning,€and€that€is€the€incidence€of€unauthorizedÌcalls,€what€can€be€done€to€reduce€the€incidence€ofÌthose.€€We€also€want€to€talk€about€the€phantom€billingÌissue€and€other€issues.€€I€would€refer€you€again€to€yourÌagenda,€we're€on€page€2€at€the€1:30€to€3:15€segment.Ì€€€€€€€€So,€I'd€like€to€begin,€and€if€I€could€just€sortÌof€arbitrarily€see€if€Dave€Gillis€would€like€to€sayÌsomething€to€begin.Ì€€€€€€€€MR.€GILLIS:€€Sure€I€would.Ì€€€€€€€€MS.€HARRINGTON:€€Since€no€one's€tent€is€up.Ì€€€€€€€€MR.€GILLIS:€€As€pointed€out€in€the€commentsÌsubmitted€by€the€subcommittee€of€the€National€AttorneyÌGenerals€Consumer€Protection€Committee,€our€officesÌcontinue€to€get€complaints€from€people€about€calls€thatÌthey€did€not€authorize,€and€the€most€typical€situationÌis€where€a€parent€is€complaining€about€calls€that€atÌleast€as€asserted€by€the€provider€were€made€from€aÌÐ	   	 ì,'2   Ðparticular€number€and€what€to€do€about€that€incidence.Ì€€€€€€€€MS.€HARRINGTON:€€What€does€that€mean,€Dave?ÌWhat€is€it€that€happens,€that€kids€are€placing€calls?Ì€€€€€€€€MR.€GILLIS:€€Yeah,€that's€it,€at€least€in€oneÌscenario€that's€it.€€There€are€other€situations€where€--Ì€€€€€€€€MS.€HARRINGTON:€€And€they€haven't€yet€gotten€900Ìblocking€or€they€have€opted€not€to€get€900€blocking?Ì€€€€€€€€MR.€GILLIS:€€That's€right.€€There€are€otherÌsituations€where€people€say€that€they€were€away€fromÌhome€on€vacation,€and€they€come€back,€and€their€billÌreflects€charges€to€pay-per-call€services,€and€in€thoseÌ--€and€those€are€not€infrequent€complaints€when€weÌcompare€notes€among€the€state€attorneys€general.Ì€€€€€€€€It's€very€troubling,€because€these€type€ofÌcomplaints€have€persisted€over€time,€and€so€in€terms€ofÌcoming€up€with€a€mechanism€to€resolve€and€address€those,Ìwe€have€to€look€to€the€industry€for€that€solution,Ìbecause€after€all,€the€consumer€doesn't€get€a€printoutÌat€the€end€of€every€month€from€their€particular€phone€asÌto€its€calling€detail,€and€rather,€they€rely€on€theÌindustry€for€the€production€of€this€that€comes€withinÌthe€bill.Ì€€€€€€€€So,€one€of€the€problems€in€dealing€with€thisÌissue€that€I€think€could€be€improved€upon€--€and€this€isÌcovered€later€on€in€the€agenda,€too,€but€I'd€like€toÌÐ	   	 ì,'2   Ðpoint€to€it€now€--€and€that€is€a€more€thorough€andÌcomplete€investigation€by€information€providers€thatÌresponds€to€inquiries€about€authorization€for€calls.Ì€€€€€€€€Frequently€when€we€send€out€complaints€toÌinformation€providers,€the€response€is€a€simple€twoÌsentence,€this€is€their€phone€number,€and€our€recordsÌreflect€the€phone€was€made.€€There€is€not€even€--€thereÌis€no€supporting€data,€and€when€you€ask€for€that,€atÌleast,€in€many€instances€we€don't€get€it.€€So,€that'sÌthe€first€point,€is€in€terms€of€investigatingÌcomplaints,€providing€supporting,€underlyingÌdocumentation€that€documents€the€fact€that€the€call€wasÌmade.Ì€€€€€€€€The€second€point€would,€again,€be€implementingÌprocedures€at€the€front€end€of€the€transaction€to€makeÌsure€that€you're€providing€a€service€to€someone€who€isÌauthorized€and€who€wants€the€service,€and€I€think€thatÌwas€best€illustrated€earlier€this€morning€when€one€ofÌthe€commenters€mentioned€that€they€used€chargebacks€as€aÌmeasure€as€to€whether€or€not€they€are€doing€their€job,Ìthat€with€a€low€chargeback,€they€understand€that€toÌreflect€that€people€are€getting€the€value€they€perceiveÌin€the€service.Ì€€€€€€€€So,€those€are€two€--€two€areas€that€I€would€likeÌto€see€the€discussion€focus€on€and€how€to€improve€theÌÐ	   	 ì,'2   Ðindustry's€response,€and€I€think€by€doing€that,€theÌproblem€of€unauthorized€charges€would€be€diminished.Ì€€€€€€€€MS.€HARRINGTON:€€Allen?Ì€€€€€€€€MR.€TAYLOR:€€Yes,€thank€you.Ì€€€€€€€€I€think€I€better€caveat€what€I€say€by€sayingÌthey€are€not€necessarily€the€opinions€of€the€FloridaÌPublic€Service€Commission,€but€basically€with€what€we'reÌabout€to€talk€about€on€the€agenda,€I€want€to€make€clearÌthat€my€concerns€are€only€about€those€charges€billed€onÌthe€local€exchange€company€billing€systems,€and€why€isÌthat?€€That's€because€that's€--€a€local€exchange€companyÌbilling€system€is€probably€the€most€open€to€fraud€andÌabuse€of€any€billing€system€anywhere,€and€that's€--€IÌthink€we€can€pretty€much€document€that€anybody€almostÌanywhere€at€any€time€can€generate€a€charge€through€thisÌbilling€system.Ì€€€€€€€€I€think€our€comments,€for€instance,€providing€anÌexample€where€a€subscriber€actually€had€900€numberÌblocking,€but€it€was€billed€for€a€900€number€call,€whichÌthe€transport€provider€admitted€never€transited€itsÌnetwork.€€So,€I€think€that's€your€definition€of€aÌphantom€call.€€How€did€that€bill€get€originated?€€Is€itÌa€figment€of€somebody's€imagination?€€I€don't€know.€€I'mÌconcerned€because€what€is€on€the€bills€does€notÌaccurately€represent€what€has€occurred,€if€anythingÌÐ	   	 ì,'2   Ðoccurred€in€some€cases.Ì€€€€€€€€I'm€concerned€because€some€of€the€ads€that€areÌused€by€information€providers€certainly€incense€otherÌfolks€and€maybe€others€not€so€young€to€essentially€ripÌoff€the€telephone€service€of€the€elderly€in€a€condoÌenvironment€where€it's€been€known€that€unauthorizedÌpeople€clip€on€and€generate€calls€for€one€reason€orÌanother,€and€I€think€we€have€to€have€some€responsibilityÌbe€placed€on€the€information€providers€to€ensure€thatÌthey€have€authorization€for€the€calls€that€theyÌreceive.Ì€€€€€€€€MS.€HARRINGTON:€€How€would€they€do€that,€Alan?Ì€€€€€€€€MR.€TAYLOR:€€Well,€I'm€glad€you€asked€thatÌquestion.€€I€think€that€there€are€several€ways€that€theyÌcould€do€that.€€One€is€to€basically€charge€900.€€I€don'tÌreally€--€if€they€use€the€900€service€access€code,€IÌwould€argue€they€didn't€have€to€get€any€otherÌauthorization,€but€if€they€are€going€to€use€anotherÌservice€access€code,€I€think€they€bear€a€responsibilityÌto€get€authorization,€and€the€way€you€could€getÌauthorization€would€be€to€use€not€some€made-up€cardÌnumber€or€not€some€instantly€developed€PIN€number€orÌcard€number,€but€the€--€and€again,€I€am€talking€justÌabout€the€local€company€bill.Ì€€€€€€€€Most€people€can€obtain€a€local€exchange€companyÌÐ	   	 ì,'2   Ðcalling€card€that€has€a€unique€PIN€number,€and€if€thisÌPIN€number€was€provided,€that€could€serve€as€being€theÌauthorization€to€receive€a€bill€for€anyone€using€thatÌPIN€number.€€Basically€this€gives€the€parents€theÌability,€without€changing€their€phone€number,€to€changeÌtheir€PIN€number€if€their€kids€used€it€in€anÌunauthorized€way,€and€it€could€serve€to€block€any€billsÌfor€someone€who€simply€knows€the€phone€number,€andÌanyone€can€know€the€phone€number,€because€it's€in€everyÌphone€book.Ì€€€€€€€€So,€I€think€we€need€sort€of€a€V-chip€forÌtelephone€service€that€parents€can€use,€and€I€think€theÌFTC€would€--€is€probably€in€a€position€to€assist€in€thisÌ--€in€this€and€that€it€needs€to€be€done.€€After€all,€ifÌyou€can€block€indecent€programming€on€your€TV,€why€notÌbe€able€to€block€indecent€telephone€calls?Ì€€€€€€€€With€respect€to€international,€I€want€to€sayÌthat,€again,€this€may€not€be€the€venue€to€discuss€it,Ìbut€I€don't€--€obviously€the€industry€has€moved€to€thisÌtype€service€access€code€for€a€reason,€and€maybe€some€ofÌthose€reasons€are€justified,€but€maybe€some€of€themÌaren't,€and€I€would€like€to€see€--€I€think€we€can€doÌsomething€about€that€through€the€tariffing€process.€€IÌjust€basically€don't€want€the€FTC€to€do€anything€thatÌwould€inhibit€what€I€would€hope€the€FCC€might€do€as€farÌÐ	   	 ì,'2   Ðas€new€tariffing€in€order€to€make€it€nonregulatedÌcharges€on€bills€which€then€can€be€better€denied.Ì€€€€€€€€MS.€HARRINGTON:€€Adam€has€a€question€and€then€weÌwill€go€to€Peter,€unless€someone€else€has€an€answer€toÌAdam's€question.Ì€€€€€€€€MR.€COHN:€€About€the€issue€of€phantom€bills,€IÌguess€there€is€some€question€about€what€that€actuallyÌmeans,€whether€it€means€that€a€call€that€was€justÌgenerated€completely€out€of€the€blue,€100€percent€false,Ìor€whether€it€means€something€maybe€a€little€bitÌbroader,€such€as€a€bill€reflecting€a€call€that€--€anÌactual€charge,€but€the€bill€is€reflecting€somethingÌdifferent€than€what€actually€happened.€€That€might€be,Ìsay,€an€international€call€to€a€country€other€than€theÌcountry€that€it€was€actually€terminated€it,€or€it€may€beÌsomething€like€a€subscriber€subscribing€to€a€phone€cardÌor€someone€subscribing€to€a€phone€card€from€a€particularÌresidence€and€then€charges€made€with€that€phone€cardÌreflected€as€a€bill€to€that€phone€number.Ì€€€€€€€€And€what€I€wanted€to€hear,€if€anyone€had€anyÌcomments€about€the€suggestion€that€we€have€someÌarrangement€where€consumers€use€a€calling€card€for€theseÌsorts€of€calls€that€are€not€a€900€number,€whether€thatÌwould€actually€open€the€door€to€more€fraud,€where,€say,Ìa€visitor€in€a€person's€home€could€subscribe€themselvesÌÐ	   	 ì,'2   Ðto€a€person's€telephone€number€with€a€calling€card€andÌthen€use€that€calling€card€from€then€on€to€charge€toÌthat€line€and€then€generate€what€might€appear€to€theÌconsumer€as€phantom€bills.Ì€€€€€€€€MS.€HARRINGTON:€€Okay,€we€are€going€to€have€someÌ--€Peter,€do€you€mind€if€we€have€some€answers€to€thatÌquestion?Ì€€€€€€€€MR.€BRENNAN:€€No,€please€do.Ì€€€€€€€€MS.€HARRINGTON:€€All€right,€Alan€and€then€Albe,Ìthen€Kim€and€Don.Ì€€€€€€€€MR.€TAYLOR:€€Let€me€just€clarify,€that€wouldÌcertainly€defeat€the€purpose€if€that€was€the€case.€€WhatÌyou€have€outlined€and€described€is€what€happens€today,Ìand€that's€what's€wrong€with€the€system,€is€that€anybodyÌcan€make€up€a€card€number€and€assign€it€to€a€telephone.Ì€€€€€€€€I'm€saying€the€only€authorized€charges€wouldÌhave€to€have€the€one€and€only€the€one€specific€PINÌnumber€associated€with€the€phone€by€the€local€exchangeÌcompany.Ì€€€€€€€€MS.€HARRINGTON:€€Albe?Ì€€€€€€€€MR.€ANGEL:€€In€response€to€--Ì€€€€€€€€MS.€HARRINGTON:€€Use€the€microphone,€please.Ì€€€€€€€€MR.€ANGEL:€€--€in€response€to€a€cluster€ofÌquestions.Ì€€€€€€€€In€terms€of€phantom€billing,€as€I€understand€it,ÌÐ	   	 ì,'2   Ðit€really€arises€from€accessing€billing€anomalies,€andÌthey€can€arise€in€two€or€three€different€ways.€€OneÌthat's€received€a€lot€of€attention€in€the€comments€isÌwhere€there€is€clip-on€fraud,€where,€in€effect,€a€thirdÌparty€goes€into€the€equipment€room€and€gains€access€toÌthe€lines€associated€with€a€residence€or€a€business€andÌplaces€calls€not€from€the€instrument€in€the€residence€orÌbusiness€but€on€some€portion€of€the€network€interfaceÌthat's€on€the€customer€side,€so€that€the€call€isÌactually€placed,€the€handling€equipment€correctlyÌidentifies€the€ANI,€but€the€call,€in€fact,€was€not€madeÌby€the€subscriber;€it€was€made€by€a€thief.Ì€€€€€€€€The€other€major€variant€is€where€someone€isÌsubmitting€billing€records,€and€these€billing€recordsÌare€completely€fraudulent.€€They€have€no€basisÌwhatsoever€in€any€call€that€was€made.Ì€€€€€€€€And€then€the€third€variant€is€that€there€was,€inÌfact,€a€call€made,€and€it€was€dialed€using€someÌsequence,€but€when€the€billing€record€is€presented,€it'sÌpresented€in€a€form€other€than€the€way€the€call€wasÌoriginally€dialed,€so€that,€for€example,€a€call€mightÌhave€been€dialed€800€but€presented€as€900€for€billing.Ì€€€€€€€€So,€the€three€different€--Ì€€€€€€€€MS.€HARRINGTON:€€There€is€a€fourth€variation,Ìtoo,€I€think€that€Adam€raised,€and€that€is€where€theÌÐ	   	 ì,'2   Ðbilling€--€the€call€is€placed€and€the€bill€is€presentedÌin€a€way€that€is€consistent€with€the€call€that€wasÌplaced,€but€the€call€never€reached€the€destination€thatÌis€assigned€to€that€number.Ì€€€€€€€€MR.€ANGEL:€€Okay,€so,€in€other€words,€durationÌof€the€call€or€circumstances€associated€with€the€priceÌper€minute€--€there€is€some€billing€information€that'sÌat€variance€with€what€should€have€happened.Ì€€€€€€€€MR.€COHN:€€Or€what€actually€did€happen,€likeÌgoing€to€a€country€other€than€the€one€that€the€billÌstates,€or€also,€I€did€--€this€might€be€similar€to€oneÌof€the€ones€you€mentioned,€but€a€calling€card€call€fromÌ--€from€another€location€that's€reflected€as€a€callÌfrom€that€--€from€that€home€instead€of€as€--€I€don'tÌknow€how€normal€calling€cards€--€in€my€bill,€when€I€useÌmy€calling€card,€there€is€a€special€section€that€saysÌ"Calling€Card,"€but€from€what€I€understand,€there€areÌconsumers€who€receive€bills€that€are€with€calling€cardsÌof€--€many€sorts€of€calling€cards,€and€it's€billed€as€aÌbill€on€--€as€if€they€have€made€a€call€from€their€homeÌwithout€using€a€card.Ì€€€€€€€€MR.€ANGEL:€€I'm€not€familiar€with€that€lastÌcategory,€but€certainly€charges€are€sometimes€presentedÌon€telephone€bills,€on€separate€bill€inserts,€thatÌreflect€operator-assisted€calls€or€specially€handledÌÐ	   	 ì,'2   Ðcalls€outside€of€the€residence,€and€they€are€billed€as€aÌbill-to-third-number€situation,€and€that's€been€a€gardenÌvariety€type€of€fraud€that€has€been€the€subject€ofÌoperator€assistance€proceedings.Ì€€€€€€€€But€on€the€issue€of€the€calling€card,€clearly€ifÌsomeone€has€your€calling€card€and€your€PIN€number,€theyÌcan€initiate€fraudulent€calls€without€your€consent.Ì€€€€€€€€MS.€HARRINGTON:€€Marianne€has€a€question.Ì€€€€€€€€MS.€SCHWANKE:€€To€follow€up€with€Albe€on€theÌsecond€way€in€which€phantom€billing€occurs,€that€is,Ìthat€someone€submits€false€billing€records,€are€youÌhypothesizing€that€this€might€happen€this€way€or€do€youÌknow€that€this€has€happened€or€does€happen?Ì€€€€€€€€MR.€ANGEL:€€I€don't€have€specific€information€IÌcan€share€with€you€right€now.€€I€do€know,€having€beenÌinvolved€as€a€telecommunications€attorney€some€years€agoÌand€having€represented€some€billing€providers,€thatÌthere€were€frequently€allegations€that€billing€messagesÌwere€presented€twice€or€presented€incorrectly,€and€IÌdon't€have€specifics€on€that,€but€basically€what€youÌhave€there€is€if€there€is€a€continuing€relationship€withÌa€billing€provider€and€a€local€exchange€company,€thereÌshould€be€some€enforcement€mechanism€between€those€twoÌparties€to€ensure€that€that€doesn't€happen,€and€if€itÌhappened€repeatedly,€I'm€almost€certain€the€localÌÐ	   	 ì,'2   Ðexchange€carrier€would€use€the€option€of€terminating€theÌcontract€on€the€basis€of€fraud.Ì€€€€€€€€MS.€SCHWANKE:€€How€would€a€LEC€know€that€theÌbilling€tapes€or€billing€information€was€fraudulent?Ì€€€€€€€€MR.€ANGEL:€€Consumer€complaints.Ì€€€€€€€€MS.€WILLIAMS:€€I€think€I€can€address€that,€too,Ìwhen€it's€--Ì€€€€€€€€MS.€HARRINGTON:€€Kim?Ì€€€€€€€€MS.€WILLIAMS:€€Yeah,€I€have€actually€seenÌseveral€of€the€situations,€the€examples€that€you€haveÌgiven,€for€instance,€a€different€number€than€that€whichÌwas€actually€dialed.€€We€had€certain€programs€that€we€--Ìcertain€types€of€programs€we€don't€want€to€bill€for,Ìperiod,€and€it's€because€of€a€company€image€policy,€andÌan€attempt,€you€know,€at€policing,€because€if€we€getÌcomplaints€about€certain€types€of€services€being€billed,Ìwe€will€go€back€to€a€company€that€we€have€a€contractÌwith€and€say€this€doesn't€meet€our€image€policy,€it'sÌnot€something€we€will€bill€for.Ì€€€€€€€€What€we€have€had€happen€is€had€companies€submitÌ900€numbers€that€were€never€dialed,€when€a€customerÌcalls€and€complains€and€says,€Well,€I€didn't€call€thisÌnumber€or€I€didn't€--€you€know,€we€can€do€a€couple€ofÌthings.€€Number€one,€we€have€called€those€900€numbers,Ìfound€them€to€be€pretty€--€you€know,€services€we€willÌÐ	   	 ì,'2   Ðbill€for.€€So,€we€go€pull€a€tape€of€what€calls€theÌcustomer€actually€made,€and€there€aren't€calls€to€thoseÌ900€numbers€at€all.€€They€are€calls€to€other€numbersÌthat€don't€meet€our€billing€policies.€€After€severalÌexperiences€with€one€company,€we€did€terminate€thatÌcompany's€billing€for€that€reason.Ì€€€€€€€€MS.€HARRINGTON:€€Do€you€ever€report€that€to€lawÌenforcement?Ì€€€€€€€€MS.€WILLIAMS:€€No,€we€did€not.Ì€€€€€€€€MS.€HARRINGTON:€€Would€you?Ì€€€€€€€€MS.€WILLIAMS:€€I€guess€I€would€have€to€checkÌwith€legal€about€that.€€I€don't€know.Ì€€€€€€€€MS.€HARRINGTON:€€I€mean,€it€seems€to€me€thatÌthat's€fairly€significant€fraud.Ì€€€€€€€€MS.€WILLIAMS:€€Well,€I€know€the€first€was€--Ì€€€€€€€€MS.€HARRINGTON:€€I€would€think.€€I€would€thinkÌthat€the€AGs€would€think€that,€too.Ì€€€€€€€€MS.€WILLIAMS:€€I€know€the€first€time€weÌterminated€billing€for€that€company€for€a€certain€typeÌof€service,€they€filed€a€lawsuit€against€us€and€went€toÌJudge€Green€on€the€whole€bit€and€then€kind€of€droppedÌthe€whole€thing.€€So,€they€came€back,€said€we€willÌcomply,€we€did€it€again,€found€out€the€same€type€ofÌthing€happened€again,€went€to€stop€it€again,€and€we€wereÌsubjected€to€complaints€that€you€are€treating€usÌÐ	   	 ì,'2   Ðdifferently€than€everybody€else€and,€you€know,€it'sÌdiscrimination.Ì€€€€€€€€Finally,€we€just€terminated€billing€with€thatÌcompany€after€a€third€shot€at€it.€€Every€time€that€thatÌcompany€would€send€us€billing,€it€would€be€--Ì€€€€€€€€MS.€HARRINGTON:€€Were€these,€for€example,€callsÌto€800€numbers€that€were€presented€as€calls€to€900Ìnumbers?Ì€€€€€€€€MS.€WILLIAMS:€€Actually,€many€of€them€were€justÌcalls€to€interstate€numbers.Ì€€€€€€€€MS.€HARRINGTON:€€Inter?Ì€€€€€€€€MS.€WILLIAMS:€€Yes,€although€they€weren't€allÌdirect-dial€calls.€€Sometimes€they€would€call€and€get€aÌdirect€call-back€and€then€turn€around€and€send€it€in€asÌa€900€call,€something€like€that.€€So,€we€have€seenÌvariations€in€that€respect.Ì€€€€€€€€Other€900€numbers€that€I€have€seen€recently,€theÌmonthly€fee€business,€you€call€a€psychic€line€one€month,Ìand€every€month€you€get€a€900€number€call€on€your€billÌfor€$9.95€for€a€one-minute€call,€but€those€calls€areÌnever€actually€made€that€month,€so€we€have€stopped€thatÌkind€of€billing.€€And€many€companies€just€looked€at€thatÌas€a€way€to€bill€a€monthly€fee,€not€necessarily€as€someÌbilling€violation,€but€it€certainly€was€a€violation.Ì€€€€€€€€MS.€SCHWANKE:€€If€a€consumer€calls€you€andÌÐ	   	 ì,'2   Ðalleges€that€a€particular€call€on€their€bill€was€neverÌmade€and€nobody€was€ever€home,€do€you€have€a€way€ofÌchecking€the€records€showing€the€calls€that€wereÌactually€dialed€from€the€home€to€see€if€the€call€wasÌever€dialed€from€that€number?Ì€€€€€€€€MS.€WILLIAMS:€€We€do.€€We€don't€necessarily€useÌit€in€every€case,€because€it€is€not€an€easy€or€a€cheapÌthing€to€do,€but€we€have€to€go€back€to€our€network€andÌpull€the€recording€of€the€recalls€that€were€made€fromÌthat€customer.€€So,€we€state€a€specific€date€and€timeÌthat€we€want€to€check,€maybe€a€certain€few€hours€on€aÌcertain€day.€€The€network€--€our€network€people€actuallyÌpull€a€copy€of€the€real€tape€and€print€it€off€and€sayÌthese€were€all€of€the€calls€that€were€made€from€thatÌphone€at€that€time.Ì€€€€€€€€MS.€SCHWANKE:€€How€far€back€do€you€maintain€thatÌdata,€do€those€records€go?Ì€€€€€€€€MS.€WILLIAMS:€€I€honestly€don't€know€how€farÌback€we€keep€it.€€I€know€they€only€want€us€to€go€45€daysÌor€so,€because€I€assume€those€tapes€are€shelved€or€itÌmay€be€destroyed,€I€don't€know.€€I€honestly€don't€knowÌhow€long€we€keep€it.€€Our€guidelines€say€we€can€only€goÌback€45€days,€but€we€have€been€able€to€get€informationÌfurther€back€than€that.Ì€€€€€€€€MR.€HILE:€€Kim,€what€would€be€the€actualÌÐ	   	 ì,'2   Ðmechanism€for€someone€to€create€a€billing€tape€thatÌshowed€a€monthly€charge€for€a€psychic€line€when€the€callÌdidn't€take€place?€€How€would€you€do€that?€€Do€youÌknow?Ì€€€€€€€€MS.€WILLIAMS:€€How€they€create€the€call?Ì€€€€€€€€MR.€HILE:€€No,€no,€how€do€they€create€a€billingÌtape€that€shows€a€call€that€was€never€made?€€Do€you€--Ìcan€it€be€done€with€a€computer?Ì€€€€€€€€MS.€WILLIAMS:€€Well,€yeah,€I€mean€--Ì€€€€€€€€MR.€HILE:€€How€does€that€happen?Ì€€€€€€€€MS.€WILLIAMS:€€Well,€the€way€calls€are€billed€isÌan€industry€format€record,€what's€called€an€EMI€record.Ì€€€€€€€€MR.€HILE:€€This€is€an€electronic€record,€right?Ì€€€€€€€€MS.€WILLIAMS:€€Correct,€and€I€would€say€thatÌthese€companies€just€create€EMI€records€with€phoneÌnumbers,€to€numbers,€dates€and€times,€to€submit€forÌbilling.€€I€mean,€there€is€a€process€to€bill€certainÌmonthly€fees€on€a€certain€type€of€record,€but€it€is€notÌbilled€as€a€call,€it€is€billed€as€monthly€fees.Ì€€€€€€€€Our€company€recently€got€out€of€the€business€ofÌbilling€monthly€fees€on€our€bills,€because€we€foundÌeverybody€was€going€to€monthly€fees€to€bill.€€I€wouldÌquestion€whether€presubscription€agreements€should€beÌmade€for€monthly€fees.€€I'm€not€sure€if€the€rule€does€orÌdoesn't€apply.€€I€think€it€would,€but€we€said€we€won'tÌÐ	   	 ì,'2   Ðbill€monthly€fees€anymore,€so€then€we€saw€people€givingÌus€900€records€instead€to€make€it€look€like€a€call€whenÌit€was€really€a€monthly€fee.Ì€€€€€€€€MS.€HARRINGTON:€€Mark?Ì€€€€€€€€MR.€HERTZENDORF:€€Just€to€follow€up,€thisÌcompany€or€some€of€these€examples€of€companies€where€youÌhave€cancelled€contracts,€is€this€a€major,€like,€billingÌaggregator€which€submitted€bills€for€hundreds€ofÌinformation€providers€or€was€this€a€contract€you€hadÌwith€an€individual€information€provider?€€How€big€aÌscope€are€we€talking€about€here?Ì€€€€€€€€MS.€WILLIAMS:€€Well,€I€mean,€we€have€seenÌdifferent€things€with€different€companies.€€We€don't€--ÌI€will€say€we€haven't€just€cancelled€anybody,€you€know,Ìfirst€strike€you're€out.€€We€certainly€try€to€work€withÌwhoever€has€a€contract€with€us€to€fix€whatever€they€areÌdoing,€you€know,€certainly€have€billing€houses€that€haveÌhundreds€of€companies€they€bill€for,€and€because€theyÌhave€got€one€bad€player,€we€don't€cancel€theirÌcontract.Ì€€€€€€€€MR.€HERTZENDORF:€€I€guess€I€am€trying€to€get€atÌhow€many€different€companies€you€have€contracts€for€toÌdo€billing.€€Do€you€have,€like,€a€hundred€contracts€--Ì€€€€€€€€MS.€WILLIAMS:€€We€have€about€80€contracts,€IÌthink,€right€now,€80€for€billing€services,€and€many€ofÌÐ	   	 ì,'2   Ðthose€are€billing€houses€who€bill€for€many€otherÌpeople.Ì€€€€€€€€MR.€HERTZENDORF:€€Do€some€of€the€billing€housesÌjust€bill€for€audiotext€services?Ì€€€€€€€€MS.€WILLIAMS:€€I€would€say€yeah,€that's€a€fairÌassessment.€€Most€of€them€--€I€think€a€lot€of€them€billÌjust€for€audiotext€or€the€monthly€fee€type€services,€butÌother€things,€like€voicemail€and€--Ì€€€€€€€€MR.€HERTZENDORF:€€Regular€long€distance,€thatÌdoesn't€go€through€a€clearinghouse,€does€it?Ì€€€€€€€€MS.€WILLIAMS:€€Some,€it€can.€€It€depends€on€whoÌ--€you€know,€if€they€are€billing€for€an€operatorÌservice€provider,€you€know,€we€do€some€of€them€forÌbilling€houses.Ì€€€€€€€€MS.€HARRINGTON:€€Okay,€Peter€and€then€Susan€--ÌI'm€sorry,€Don,€did€you€--€on€that€question,€did€youÌhave€something?Ì€€€€€€€€MR.€KLUG:€€Yes,€I€did.Ì€€€€€€€€I€think€it€would€be€useful€for€the€purpose€ofÌthis€discussion€to€distinguish€between€unauthorizedÌcalls€where€everyone,€the€caller€and€the€carrier€and€theÌbiller€agrees€the€call€was€actually€made,€versus€phantomÌ--Ì€€€€€€€€MS.€HARRINGTON:€€Made€from€the€subscriber'sÌphone?ÌÐ	   	 ì,'2   Ð€€€€€€€€MR.€KLUG:€€Telephone.Ì€€€€€€€€MS.€HARRINGTON:€€Not€from€a€clip-on.Ì€€€€€€€€MR.€KLUG:€€Or€a€clip-on.€€The€phone€call€wasÌmade€but€unauthorized,€versus€a€bill€is€rendered€forÌwhich€a€call€never€was€made.€€I€have€been€in€my€positionÌfor€four€years,€I€have€been€responsible€for€managementÌof€tens€of€millions€of€900€calls.€€I€have€never€heard€ofÌone€instance€--€I'm€not€saying€they€don't€exist€--€of€aÌcall€that€was€rendered€to€a€billing€entity€for€which€theÌcall€was€never€made.€€If€that€situation€exists,€it'sÌvery€easy€for€either€the€LEC€or€the€interexchangeÌcarrier€to€audit€their€AMA€tapes,€the€tapes€by€whichÌcalls€are€made,€to€see€if,€indeed,€it€was€made.Ì€€€€€€€€MS.€WILLIAMS:€€Well,€the€AMA€tape€is€the€processÌI€was€referring€to.Ì€€€€€€€€MR.€KLUG:€€There€is€a€process€in€place.Ì€€€€€€€€MS.€WILLIAMS:€€Right.Ì€€€€€€€€MR.€KLUG:€€Because€I€think€there€are€remediesÌfor€both€these€problems,€and€I€think€we€ought€to€kind€ofÌdistinguish€between€unauthorized€calls,€whether€it'sÌchildren€or€clip-on€fraud,€versus€calls€that€aren'tÌmade,€the€"phantom€calls,"€which€is€a€new€term€to€me.Ì€€€€€€€€MS.€HARRINGTON:€€Kim,€did€you€have€a€rejoinder?Ì€€€€€€€€MS.€WILLIAMS:€€Yeah,€the€problem€with€that€is€weÌcan€tell,€but€usually€we€are€at€the€point€where€we€haveÌÐ	   	 ì,'2   Ðgotten€so€many€complaints€already,€because€that€billingÌcomes€all€in€at€once,€and€you€get€customers€calling,€andÌnormally€it's€the€customers€who€have€900€block€and€theyÌget€a€charge€on€their€bill,€and€it€flags€--€it€goes€toÌtheir€attention€first.€€They€are€the€ones€who€are€comingÌto€us€first€saying,€Wait€a€minute,€I€have€a€900€block,Ìhow€did€I€get€a€900?Ì€€€€€€€€We€go€pull€that€tape€and€say,€Hey,€you€neverÌmade€a€900€call.€€So,€you're€right,€we€can€tell€that,Ìbut€it€has€already€hit€a€lot€of€people€before€itÌactually€gets€to€me€from,€you€know,€all€five€statesÌwhere€this€has€occurred.Ì€€€€€€€€MR.€HERTZENDORF:€€If€you€find€out€that€there€isÌphantom€billing€going€on,€someone€making€up€the€charges,Ìdo€you€remove€those€charges€even€if€the€consumer€has€notÌcomplained?Ì€€€€€€€€MS.€WILLIAMS:€€We€--€no,€I€can't€say€that€we€goÌout€and€look€for€every€consumer€that€was€billed.€€WeÌmight€go€to€that€company€and€expect€that€they€would€makeÌadjustments€for€all€of€them.€€We€certainly€makeÌadjustments€as€we€get€calls€from€customers,€but€I€can'tÌsay€that€we€have€gone€back€to€try€to€poll€every€bill€toÌnotify€every€customer.€€I€mean,€we€hope€that€customersÌlook€at€their€bills€before€they€pay€them,€although€IÌknow€that€that€doesn't€always€occur.ÌÐ	   	 ì,'2   Ð€€€€€€€€MS.€HARRINGTON:€€Allen?Ì€€€€€€€€MR.€HILE:€€I€just€want€to€clarify€one€thing,€andÌthat€is€what€is€the€relationship€between€this€thing€thatÌyou€refer€to€as€an€AMA€tape€and€a€billing€tape?Ì€€€€€€€€MS.€WILLIAMS:€€An€AMA€type€is€the€networkÌrecording€of€all€the€calls€that€were€made€from€thatÌcustomer's€location.Ì€€€€€€€€MR.€HILE:€€Who€makes€that€tape?Ì€€€€€€€€MS.€WILLIAMS:€€The€LEC's€network.€€I€don't€knowÌall€the€right€terms,€I€don't€think,€but€our€networkÌdoes,€versus€the€billing€tapes€coming€to€me€from€aÌbilling€customer€of€mine.Ì€€€€€€€€MR.€HILE:€€And€the€AMA€tape€shows€the€origin,Ìthe€destination€and€the€duration?Ì€€€€€€€€MS.€WILLIAMS:€€Yes,€yes.Ì€€€€€€€€MR.€HILE:€€Anything€else?Ì€€€€€€€€MS.€WILLIAMS:€€It€--€I€don't€--€whenever€I€haveÌgotten€a€printout,€I€really€don't€understand€most€ofÌit.€€I€just€know€the€right€things€to€look€for,€to€beÌquite€honest.Ì€€€€€€€€MS.€HARRINGTON:€€Kim,€could€you€find€out€theÌanswer€to€that€question€and€supplement€the€record?Ì€€€€€€€€MS.€WILLIAMS:€€Of€what€else€is€on€the€AMA€tape?Ì€€€€€€€€MS.€HARRINGTON:€€What€else€is€on€the€AMA€tape.Ì€€€€€€€€MS.€WILLIAMS:€€Sure.ÌÐ	   	 ì,'2   Ð€€€€€€€€MS.€HARRINGTON:€€Peter€or€--€Susan,€I'm€sorry,Ìdo€you€have€something€on€this€point€or€--Ì€€€€€€€€MS.€GRANT:€€Yes.Ì€€€€€€€€MS.€HARRINGTON:€€Okay.Ì€€€€€€€€MS.€GRANT:€€There€are€so€many€ways€thatÌunauthorized€charges€or€what€the€consumer€would€considerÌan€unauthorized€charge€can€appear€on€the€consumer'sÌbill,€and€we€have€heard€about€a€lot€of€them,€and€we€hearÌabout€them€every€day.€€The€problem€for€consumers€is€thatÌthey€don't€necessarily€know€how€it€occurred.€€They€mightÌhave€called€an€800€number€and€now€they€are€being€billedÌfor€a€900€number,€but€they€may€not€connect€the€two.ÌThey€--€it€may€be€a€phantom€billing.Ì€€€€€€€€There€may€have€been€people€in€their€householdÌwho€made€calls€or€maybe€not,€and€they€may€have€called€aÌnumber€thinking€that€it€was€free€and€then€startedÌgetting€those€monthly€voicemail€charges,€because€maybeÌtheir€number€was€captured.€€But€it's€very€difficult€forÌthem€to€know.€€They€are€getting€the€bill€a€few€weeksÌafter€the€calls€were€supposedly€made,€and€when€theyÌcontact€the€LECs€initially€and€then€try€to€work€theirÌway€up€the€line,€it€is€very€difficult€for€them€to€getÌinformation€about€how€did€this€occur.Ì€€€€€€€€The€presumption€often€seems€to€be€that€you€madeÌthe€call€unless€you€can€prove€otherwise€and€not€theÌÐ	   	 ì,'2   Ðother€way€around.€€So,€the€burden€is€really€put€on€theÌconsumer,€who€is€the€least€able,€of€all€the€partiesÌhere,€to€determine€how€it€happened€and€to€prove€thatÌthey€didn't€make€the€call.Ì€€€€€€€€And€I€think€the€Muldova€case€is€a€perfectÌexample€of€a€situation€where€consumers€didn't€have€aÌclue€until€they€got€their€phone€bills€about€that.€€IÌknow€we€will€be€talking€about€this€later,€but€what€I'mÌleading€up€to€is€that€as€we€think€about€things€likeÌsterner€messages€for€consumers€and€creating€a€data€baseÌof€repeat€offenders,€we€have€to€remember€that€there€areÌall€different€ways€that€these€charges€can€appear€onÌconsumers'€bills,€that€they€may€really€not€have€beenÌresponsible€for,€and€if€this€might€result,€ultimately,Ìin€their€being€blocked€from€getting€various€kinds€ofÌtelephone-based€services€that€they€want€and€need,€thenÌit's€a€real€concern€besides€just€the€issue€of€fightingÌover€the€bill.Ì€€€€€€€€MS.€HARRINGTON:€€Peter?Ì€€€€€€€€MR.€BRENNAN:€€Yeah,€and€actually€in€response€toÌthat,€those€who€also€provide€various€kinds€of€servicesÌthat€they€will€want€and€need€also€have€a€stake€in€seeingÌthat€the€business€is€legitimate,€and€so€our€efforts€areÌto€that€end.Ì€€€€€€€€I€just€wanted€to€clarify€for€the€record,€IÌÐ	   	 ì,'2   Ðwanted€to€object€to€the€characterization€made€by€theÌgentleman€from€Florida,€perhaps€unintentionally,€thatÌthese€calls€are€indecent.€€Just€for€the€record,€I€wantedÌto€clarify€that.Ì€€€€€€€€MR.€TAYLOR:€€Well,€I'll€be€glad€to€respond€thatÌnot€all€900€calls€are€indecent,€maybe€not€even€all€800Ìcalls,€but€I'm€certainly€aware€that€there€are€some.Ì€€€€€€€€May€I€also€take€this€opportunity€to€just€sayÌthat€I€--€I€think€some€discussion€about€--€I€appreciateÌthe€gentleman€from€MCI€clarifying€about€the€variousÌresponsibilities€about€whether€calls€originate€or€not,Ìbut€I€would€like€to€say€that€just€because€a€callÌoriginates€from€a€particular€number,€I'm€not€able€toÌmake€the€leap€that€the€subscriber€to€that€phone€isÌautomatically€indebted€to€the€company€that€provided€theÌinformation€or€the€service.Ì€€€€€€€€As€a€regularity,€I€know€for€tariff€chargesÌhistorically€we€have€said,€Okay,€for€regulated€services,Ìregardless€of€who€made€the€call,€if€it€comes€from€aÌparticular€number,€that€the€subscriber€is€liable;Ìhowever,€we're€talking€about€unregulated€charges€here.Ì€€€€€€€€Perhaps€I'm€misinformed,€maybe€somebody€canÌrefer€me€to€some€law€that€says€that€the€subscriber€isÌresponsible€for€any€call€of€an€unregulated€nature€fromÌtheir€phone.€€To€me,€it's€sort€of€like€having€someoneÌÐ	   	 ì,'2   Ðorder€a€lawn€mower€from€Sears.€€Sears€is€under€theÌobligation€to€obtain€billing€information.€€Just€becauseÌthey€call€from€somebody's€phone€doesn't€mean€the€phoneÌprovider€is€obligated€to€pay€for€it.Ì€€€€€€€€MS.€HARRINGTON:€€Well,€I€think€in€--€at€theÌfederal€level,€at€least,€there€is€a€presumption€in€theÌlaw€that€a€call€placed€--€that€the€subscriber€is€liableÌfor€charges€that€are€incurred€because€of€calls€placedÌfrom€the€subscriber's€phone.Ì€€€€€€€€MR.€TAYLOR:€€Well,€where€in€the€law?Ì€€€€€€€€MS.€HARRINGTON:€€Well,€where€is€Heather?ÌHeather€McDowell€used€to€work€here,€now€at€Venable,€andÌshe€is€a€rulemaking€alum.Ì€€€€€€€€You€used€to€know€the€answer€to€that€question,ÌHeather.€€Do€you€still€know€it?Ì€€€€€€€€MS.€MCDOWELL:€€I€believe€it's€through€FCC€order,Ìbut€I€would€want€to€check.Ì€€€€€€€€MS.€HARRINGTON:€€We€believe€it's€through€FCCÌorder,€but€we€have€to€check€to€make€sure.€€Someone€elseÌmay€know€the€answer.€€Heather€hasn't€worked€here€for€aÌnumber€of€years,€so€she€is€no€longer€the€personÌresponsible€for€having€the€answer€to€that€question,Ìalthough€Heather,€as€far€as€we're€concerned,€you€areÌalways€responsible.Ì€€€€€€€€But€there€is€an€FCC€order,€and€I€think€thereÌÐ	   	 ì,'2   Ðalso,€as€I€recall,€are€some€either€state€or€DistrictÌCourt€cases€brought€that€stand€for€the€proposition€thatÌcalls€that€are€placed€from€the€subscriber's€phone€areÌthe€subscriber's€responsibility.Ì€€€€€€€€MR.€TAYLOR:€€Well,€I€would€hope€that€that€sameÌlaw€implies€that€--€because€that€would€be€illegal€inÌevery€other€respect€--Ì€€€€€€€€MS.€HARRINGTON:€€It€doesn't€mean€that€theÌsubscriber€doesn't€have€the€right€to€challenge,€andÌcertainly€under€the€900€number€rule€regime,€there€is€aÌright€to€dispute,€but€it's€more€that€there's€aÌpresumption€here€that's€rebuttable.Ì€€€€€€€€MR.€STEIMEL:€€Alan,€I€would€be€happy€to€send€youÌthose€cases.€€They€arise€under€the€toll€fraud€--€aÌseries€of€toll€fraud€cases,€but€I€would€be€happy€to€sendÌthose€to€you.Ì€€€€€€€€MR.€TAYLOR:€€If€you€give€me€a€cite,€I€can€findÌthem.Ì€€€€€€€€MR.€STEIMEL:€€I€will€have€to€go€back€to€theÌoffice,€but€I€will€get€the€cites€to€you.Ì€€€€€€€€MS.€HARRINGTON:€€Excellent.Ì€€€€€€€€Jill?Ì€€€€€€€€MS.€SANDFORD:€€By€the€time€the€consumers€get€toÌus,€whether€it's€clip-on€fraud€or€a€fraudulent€billingÌrecord€having€been€sent,€they€are€tremendously€angry,ÌÐ	   	 ì,'2   Ðand€part€of€the€anger€comes€from€having€to€go€throughÌthis€maze€to€discover,€if€they€can,€who€put€the€chargesÌon€the€bill.€€The€consumer€first€will€call€the€localÌtelephone€company,€who€often€times€will€say,€we're€justÌa€billing€and€collection€agent,€you€have€to€call€thisÌother€entity.Ì€€€€€€€€Then€the€consumer€will€get€the€billingÌaggregater,€and€the€billing€aggregater€will€say€theÌexact€same€thing,€and€here's€another€number€you€canÌcall.€€Often€times€that€other€number€is€disconnected,€noÌone€is€answering,€or€they€just€put€the€consumer€onÌhold.Ì€€€€€€€€What€we€have€also€found€in€some€of€ourÌenforcement€actions€is€that€that€final€step,€theÌinformation€provider,€has€already€discounted€theÌaccounts€to€a€factor.€€So,€they€are€even€out€of€theÌpicture.€€At€that€point,€what€is€a€consumer€to€do€andÌwhat€are€the€remedies?€€And€in€New€York,€we€have€NYNEX,Ìand€they€are€certainly€not€as€liberal€at€charging€backÌaccounts€as€has€been€represented€--Ì€€€€€€€€MS.€HARRINGTON:€€Well,€now€you€have€BellÌAtlantic.Ì€€€€€€€€MS.€SANDFORD:€€Soon,€and€I€hope€they€are€moreÌliberal€than€NYNEX,€who€seems€to€pass€everything€along,Ìbut€at€that€stage,€what€is€a€consumer€to€do€to€disputeÌÐ	   	 ì,'2   Ðwhen€the€IP€has€all€but€disappeared?Ì€€€€€€€€MS.€HARRINGTON:€€Jon?Ì€€€€€€€€MR.€SHAUB:€€Regarding€a€question€asked€earlierÌby€Allen,€additional€information€on€what's€on€theÌnetwork€AMA€tapes,€in€addition€to€the€calling€number€andÌthe€called€number€and€the€duration€of€the€call,€there'sÌalso€the€time€that€the€call€attempt€was€made€and€theÌtime€that€the€call€attempt€was€answered€if,€in€fact,€itÌwas€answered.€€If€the€call€was€never€answered,Ìrepresented€by€a€signal€from€the€far€end,€then€noÌbillable€event€is€created€and€no€billing€record€goesÌforward.€€So,€it's€a€pretty€tight€process,€and€that€canÌbe€used€as€an€investigative€tool€within€the€retentionÌperiod,€which€is€now€18€months,€I€believe.Ì€€€€€€€€MS.€HARRINGTON:€€Mark,€does€that€answer€yourÌquestion?Ì€€€€€€€€MR.€HERTZENDORF:€€No,€not€exactly,€but€it's€sortÌof€very€much€related.Ì€€€€€€€€MS.€HARRINGTON:€€Do€you€want€to€put€yourÌquestion€out€on€the€table,€then?Ì€€€€€€€€MR.€HERTZENDORF:€€Yeah,€I€just€wanted€someÌclarification€on€whether€it's€practical€to€authenticateÌbilling€tapes€from€the€AMA€tapes,€would€be€one€question,Ìand€the€second€question€would€be€how€feasible€it€is€toÌuse€the€AMA€tape€as€part€of€a€standard€investigationÌÐ	   	 ì,'2   Ðthat€might€take€place€in€response€to€a€dispute.Ì€€€€€€€€MS.€WILLIAMS:€€I€think€I€would€probably€have€toÌget€a€little€more€information€on€the€AMA.€€I€know,€atÌleast€the€way€it€was€also€presented€to€me,€is€that€itÌwas€very€difficult€to€go€pull€the€AMA€tapes.€€Again,€weÌjust€get€this€printout€to€wade€through,€and€you€areÌlooking€for€certain€dates€and€times.Ì€€€€€€€€MR.€HERTZENDORF:€€Presumably€it€is€matched€up€--Ìcould€be€matched€up€by€a€computer,€although€I€imagineÌthat€could€be€expensive,€too.Ì€€€€€€€€MS.€WILLIAMS:€€Yeah,€I€mean,€I€don't€know€thatÌanybody€has€looked€at€that€side€of€the€business€as€beingÌ--€as€trying€to€create€some€kind€of€technology€to€takeÌthat€and€map€it€back€or€match€it€back.€€Certainly€mostÌof€what's€recorded€there€isn't€even€billed.€€You€haveÌtons€of€local€calls,€and€I€think€the€AMA€tape€recordsÌeverything€that's€done€from€that€phone,€and€once€a€callÌis€made,€we€don't€necessarily€know€where€it's€going€orÌwhere€it€ends€up,€you€know,€ultimately.€€If€you€call€anÌoperator€or€you€call€an€800€number€to€an€operator,€thenÌit's€gone€from€us,€and€it€is€no€longer€in€our€hands€toÌknow€where€it's€terminated.Ì€€€€€€€€MS.€HARRINGTON:€€Kim,€what€does€AMA€stand€for?Ì€€€€€€€€MS.€WILLIAMS:€€I€honestly€don't€know.Ì€€€€€€€€MS.€HARRINGTON:€€I€see€Don€and€Jon,€who€areÌÐ	   	 ì,'2   Ðphone€guys€--Ì€€€€€€€€MR.€SHAUB:€€Automated€message€accounting.Ì€€€€€€€€MS.€HARRINGTON:€€Automated€message€accounting,Ìokay.€€Don€and€Jon,€it€looked€like€to€me€you€hadÌsomething€that€was€responsive€to€Mark's€question.Ì€€€€€€€€MR.€KLUG:€€Yes,€the€way€the€billing€messages€areÌput€together,€Jon€alluded€it's€a€pretty€tight€question.ÌIf€we€were€billing,€for€example,€2,900,000€calls€a€monthÌwith€SBC,€we€would€send€them€electronically€the€detailedÌinformation€of€the€caller's€telephone€number,€the€900Ìnumber,€the€duration€of€the€call€and€the€price,€and€thenÌthey€would€confirm€back€and€say,€Yes,€we€received€thisÌdollar€amount€and€these€number€of€calls.€€So,€we€know€itÌleaves€a€--Ì€€€€€€€€MR.€HERTZENDORF:€€I€missed€that€last€sentence.ÌI€don't€understand.Ì€€€€€€€€MR.€KLUG:€€Okay,€let's€take€a€900€call€that'sÌmade€from€your€telephone,€and€let's€assume€it's€from€SBCÌterritory.€€A€900€number€is€not€portable,€so€after€youÌdial€the€first€six€digits,€SBC€can€determine€which€CICÌcode,€carrier€identification€code,€belongs€to€that€900Ìprefix€and€transfers€the€call€over€to€them.Ì€€€€€€€€The€IXE,€the€long€distance€carrier,€let's€sayÌMCI€as€an€example,€would€take€that€900€number,€and€weÌwould€look€up€in€our€data€base€what€ten-digit€POTSÌÐ	   	 ì,'2   Ðnumber,€plain€old€telephone€service,€that€terminatesÌto.€€So,€we€would€then€connect€the€telephone€number€thatÌyou€dialed€to€the€terminating€location,€which€is€theÌinformation€provider.Ì€€€€€€€€After€the€preamble,€we€would€--€assuming€the€--Ìyou€didn't€hang€up,€we€would€time€the€call.€€At€the€endÌof€the€month,€we€would€take€our€billing€tape€that€hadÌyour€telephone€number,€the€duration€of€the€call,€theÌprice€of€the€call,€and€electronically€send€it€to€SBC€toÌhave€it€put€on€your€telephone€bill.€€SBC€would€confirmÌthat€they€received€the€information€--Ì€€€€€€€€MS.€WILLIAMS:€€Well,€just€that€we€received€hisÌtape,€just€his€billing€tape.Ì€€€€€€€€MR.€HERTZENDORF:€€Okay,€I€thought€you€confirmedÌ--Ì€€€€€€€€MR.€KLUG:€€Yeah,€Kim€said€earlier,€I€think€itÌwas€Kim,€said€they€were€actually€buying€the€receivablesÌat€that€point.€€So,€it's€a€financial€transaction€justÌlike€banking.€€So,€there€is€a€handshake€there.Ì€€€€€€€€If€it€turns€out€that€you€then€complain€saying€IÌnever€made€this€call,€then€we€can€go€back,€MCI,€the€IXEÌcarrier,€through€SBC,€and€look€at€our€tape€and€say,€yep,Ìwe€have€got€the€ANI€correct,€we€have€got€the€900€numberÌcorrect,€and€we€verify€the€call€was€made.Ì€€€€€€€€MR.€HERTZENDORF:€€So,€you€have€sort€of€recordsÌÐ	   	 ì,'2   Ðthat€are€analogous€to€the€AMA€tape€that€the€LEC€keeps?Ì€€€€€€€€MS.€HARRINGTON:€€Mark,€use€your€microphone.Ì€€€€€€€€MR.€HERTZENDORF:€€So,€in€other€words,€you€haveÌrecords€that€you€feel€are€sort€of€analogous€to€the€AMAÌtapes€that€the€LEC€keeps?Ì€€€€€€€€MR.€KLUG:€€I€may€be€wrong€here,€jump€in,€Kim,Ìbut€from€a€long€distance€perspective,€the€timing€is€doneÌby€the€long€distance€provider,€not€by€the€LEC€company.Ì€€€€€€€€MS.€WILLIAMS:€€I€think€I€know€the€start€time€andÌstop€time,€when€the€guy€went€off€hook€to€make€the€call,Ìand€I€think€I€know€the€hang-up€time€from€the€AMA€tape,Ìbut€I€think€that€information€is€in€the€central€officeÌthat€carried€it.€€I€think€our€business€office€has€to€goÌback€to€the€originating€central€office€where€thatÌcustomer's€service€is€to€say€give€me€a€copy€of€that€AMAÌtape€for€this€date€and€time.Ì€€€€€€€€So,€that's€why€I'm€--€when€I€look€at€what€has€toÌbe€done€to€even€get€that,€I€don't€think€--€there€isÌcertainly€no€ties€to€my€billing€system,€and€I€have€to€goÌto€every€central€office€out€there,€wherever€thatÌcustomer€is€served,€and€get€that€information.€€I€thinkÌthat's€a€whole€lot€different€from€my€billing€system,Ìwhich€is€in€a€central€location.Ì€€€€€€€€MS.€HARRINGTON:€€This€whole,€I€think,€exchangeÌand€colloquy€underscores,€if€any€of€you€were€confused,ÌÐ	   	 ì,'2   Ðthe€fact€that€you€are€not€at€the€FCC€today,€you€are€atÌthe€FTC,€and€so€we€have€need€for€some€remedial€educationÌon€this,€and€it's€very€useful.Ì€€€€€€€€Gordie€--€Albe,€I'm€sorry.Ì€€€€€€€€MR.€ANGEL:€€The€only€thing€I€would€add€to€theÌprevious€colloquy,€just€to€clarify€things€for€staff,€isÌthat€in€the€context€of€a€900€call,€the€dominantÌcarriers,€AT&T€and€MCI,€are€actually€rating€the€call€inÌmost€instances€in€that€they€are€timing€the€duration,Ìthey€are€making€the€connections,€and€they€are€sendingÌthe€billing€tape€directly€to€the€local€exchange€carrier,Ìwithout€any€manipulation€of€the€billing€tape€by€theÌinformation€provider€or€service€bureau.Ì€€€€€€€€That€is€distinct€from€the€situation€where€aÌbilling€entity€other€than€AT&T€and€MCI€are€involved,Ìwhere€the€duration€of€the€call€is€typically€taken€at€theÌservice€bureau/IP's€location.€€That€billing€tape€is€thenÌsent€to€the€billing€aggregater€or€billing€entity€andÌthen€on€to€the€local€exchange€carrier.Ì€€€€€€€€MS.€HARRINGTON:€€Jon?Ì€€€€€€€€MR.€ANGEL:€€I€just€wanted€to€see€if€we€could€--Ì€€€€€€€€MS.€HARRINGTON:€€I'm€sorry.Ì€€€€€€€€MR.€ANGEL:€€--€address€a€couple€of€the€issues,€IÌjust€want€to€make€quick€points.Ì€€€€€€€€MS.€HARRINGTON:€€Sure.ÌÐ	   	 ì,'2   Ð€€€€€€€€MR.€ANGEL:€€On€the€questions€that€go€toÌunauthorized€calls,€we€need€to€define€what€anÌunauthorized€call€is.€€If€what€we're€referring€to€isÌcalls€by€minors,€then€it€should€be€identified€as€such.ÌIf€it's€a€call€by€someone€of€majority€in€the€householdÌbut€it€wasn't€authorized,€you€weren't€allowed€to€use€theÌphone,€you€incurred€the€charge,€then€it's€of€a€differentÌcharacter.€€I€just€want€to€give€the€example€of€how€someÌthings€work€in€my€household€as€a€--€just€a€tool€forÌexamining€the€issue.Ì€€€€€€€€I€have€three€children€and€a€housekeeper.€€MyÌ12-year-old€daughter€calls€her€friends€that€she€met€inÌcamp,€incurring€interstate€charges,€and€no€matter€what€IÌsay€to€the€local€exchange€carrier,€those€charges€stick.ÌShe€wasn't€authorized€to€do€that,€but€as€a€result€of€theÌlaw,€those€charges€stick.Ì€€€€€€€€My€son€David€calls€900€numbers.€€I€give€himÌpermission€on€a€case-by-case€basis€to€make€those€calls.ÌEvery€once€in€a€while,€I'll€uncover€calls€that€I€didn'tÌauthorize€but€perhaps€his€mother€authorized.€€If€I€wereÌto€call€the€local€exchange€carrier€and€say€those€callsÌweren't€authorized,€they€are€wiped€off€the€billÌinstantaneously.Ì€€€€€€€€If€the€housekeeper€has€made€the€call€and€theyÌare€a€900€call,€they€are€not€going€to€be€sustainable,ÌÐ	   	 ì,'2   Ðand€they€are€wiped€off€the€bill.€€So,€I€think€there's€aÌdouble€standard,€and€maybe€the€standard€really€revolvesÌaround€whether€they€are€regulated€charges€or€unregulatedÌcharges,€but€they€are€distinctly€different€than€theÌcategory€of€phantom€calls.€€They€are€calls€that€are€madeÌwhere€perhaps€there€aren't€necessary€parental€controlsÌor€controls€over€people€of€majority€in€the€household,Ìbut€to€isolate€a€different€issue€but€very€pertinent€toÌthis€discussion,€I€want€to€relay€a€circumstance€thatÌinvolved€my€company.Ì€€€€€€€€We€were€presented€with€over€$5,000€or€$6,000€inÌcharges.€€What€had€happened€was€calls€were€made€from€aÌnumber€to€various€information€services€providing€sportsÌresults€and€handicapping€information.€€In€month€one,Ìthose€calls€totaled€to€$300€or€$400.€€They€were€unpaidÌby€the€next€billing€cycle.€€In€month€two,€the€callsÌcontinued,€and€they€amounted€to€$700€--Ì€€€€€€€€MS.€HARRINGTON:€€They€were€unpaid€because€theyÌwere€contested?Ì€€€€€€€€MR.€ANGEL:€€No,€they€were€just€unpaid,€and€theÌlocal€exchange€carrier€was€getting€around€to€questioningÌwhat€was€going€on,€and€by€the€end€of€the€second€month,Ìthe€first€month's€charges€were€not€paid,€and€now€you€hadÌthe€second€month's€charges€added€on€top€of€that,€so€theyÌwere€about€$1,100.€€And€what€it€turned€out€uponÌÐ	   	 ì,'2   Ðinvestigation€--€actually,€the€interexchange€carrierÌintervened,€because€it€was€their€800€number€on€theÌbilling€page€in€respect€to€these€900€numbers.€€TheÌperson€that€was€the€bill€payer,€head€of€the€householdÌsaid,€we€are€certain€we€know€what€these€are€about,€thisÌis€our€visiting€nephew€who€has€an€addiction€to€sportsÌand€will€make€good€for€the€payment.Ì€€€€€€€€The€service€continued€to€that€location,€so€thatÌin€the€third€month,€there€were€$2,000€in€charges€runÌup.€€I€think€you€get€the€idea.€€By€the€time€theÌchargeback€arrived€at€our€doorstep€five€or€six€monthsÌlater,€we€had€had€our€first€taste€of€what€was€going€onÌhere,€and€we€went€back€to€the€interexchange€carrier€andÌasked€why€we€were€presented€with€$5,000€worth€of€chargesÌfor€calls€that€originated€six€and€seven€months€ago.ÌThey€said,€you€know,€the€matter€was€in€treatment,€andÌit's€not€going€to€be€paid€by€the€consumer.Ì€€€€€€€€So,€we€asked€as€to€the€details,€and€it€wasÌunclear€whether€or€not€the€person€that€made€the€callsÌwas€even€a€minor,€and€it€was€clear€that€their€billingÌfiles,€in€terms€of€treatment,€showed€that€the€consumerÌagreed€to€pay€for€the€charges,€at€least€at€month€twoÌlevel.Ì€€€€€€€€When€we€asked€for€that€documentation,€not€onlyÌwere€we€denied€it,€but€we€weren't€even€told€the€billingÌÐ	   	 ì,'2   Ðname€and€address.€€So,€that€helps€to€illustrate€theÌproblem.Ì€€€€€€€€MS.€HARRINGTON:€€If€I€could€make€a€point€aboutÌyour€first€point,€and€that€is€that€--€which€was€thatÌthere€seems€to€be€a€double€standard,€the€point€that€IÌwould€make€is€that€in€the€--€in€the€TDDRA,€there€is€aÌdifferent€standard,€in€a€sense,€for€pay-per-callÌservices€that€are€directed€to€minors€and€implicitly,€IÌthink,€for€minors'€use€of€pay-per-call€services.€€ItÌdoesn't€necessarily€mean€that€the€application€here€isÌjust€right,€but€there€is€under€the€law€a€differentÌstandard.Ì€€€€€€€€I€don't€know€who€you€are€from€the€TSIA€downÌthere,€someone€new€has€joined€us.Ì€€€€€€€€MR.€PASSON:€€My€game€is€Gary€Passon,€and€I€amÌthe€western€chairman€of€the€TSIA,€and€I€am€sitting€inÌfor€Richard€for€a€little€bit€to€give€him€a€bit€of€aÌbreak.€€I€guess€I€would€like€to€make€two€quick€comments,Ìone€as€it€relates€to€phantom€calls.€€I€think€what€thisÌhas€been€very€helpful€to€do€is€to€find€that€there€are€aÌlot€of€different€reasons€that€sometimes€call€recordsÌdon't€match€what€the€consumer€thinks€the€call€recordsÌshould€look€at.Ì€€€€€€€€Some€of€them€are€obviously€affected€by€fraud,Ìdue€to€physical€location,€clip-on,€some€could€be€due€toÌÐ	   	 ì,'2   Ðfraud€based€on€the€information€provider€providingÌinaccurate€or€incorrect€information€to€the€localÌexchange€carrier,€and€a€number€of€different€cases,€but€IÌthink€one€thing€that€would€be€helpful€to€keep€in€mindÌhere€is€that€the€largest€single€reason€that€records€areÌmarked€as€being€recoursed€back€or€charged€back€isÌdenying€all€knowledge,€and€if€we€presume€for€a€second€--Ìand€I€think€it's€a€very€reasonable€presumption€--€thatÌAT&T€and€MCI€are€unlikely€to€create€phantom€calls,Ìessentially€create€records,€you€know,€for€their€own€goodÌpurposes,€and€since€they€control€the€network€timing€andÌbilling€records€themselves€in€conjunction€with€a€LEC,Ìthat€for€--€if€the€--€if€we€take€the€chargeback€data€ofÌbetween€20€and€40€percent,€and€7€percent€of€all€recordsÌare€marked€as€denying€all€knowledge,€what€we€are€reallyÌseeing€is€14€to€35€percent€of€the€phone€calls€that€areÌbeing€made€are,€in€fact,€the€--€the€subscriber€of€theÌlines€doesn't€seem€to€recognize€the€call,€and€I€thinkÌthat€that's€probably€a€good-sized€step.Ì€€€€€€€€I€think€that's€a€bit€of€a€leap€for€us€to€believeÌthat,€you€think,€that€that€significant€number€of€the€900Ìcalls€are€really€not€being€generated€with€the€knowledgeÌof€the€subscriber€in€that€particular€home.ÌConsequently,€I€think€it's€probably€also€unreasonable€toÌthink€that€they€shouldn't€take€some€of€theÌÐ	   	 ì,'2   Ðresponsibility€for€those€calls,€and€I€think€what€mightÌbe€at€hand€here€is€where€do€we€draw€those€lines,€what'sÌreasonable€lines€to€make€and€what€resolution€and€disputeÌprocess€solution€should€we€have€to€resolve€those€cases.Ì€€€€€€€€MS.€HARRINGTON:€€Gary,€one€question€that€we'reÌgoing€to€be€focusing€on€almost€immediately€is€theÌquestion€about€what€billing€entities€are€doing€to€complyÌwith€the€rules€requirement€that€they€undertake€aÌreasonable€investigation€of€charges€that€are€disputed,Ìand€there€may€be€something€in€the€discussion€on€thatÌquestion€that€actually€goes€to€the€question€that€you'veÌjust€raised,€and€I€would€like€to€urge€everyone€to€startÌthinking€about€that,€because€we€are€about€to€transitionÌto€that€part€of€the€discussion.Ì€€€€€€€€Marianne,€you€have€a€question.Ì€€€€€€€€MS.€SCHWANKE:€€I€would€just€like€to€go€back€toÌunauthorized€calls€for€a€moment€and€address€one€of€theÌquestions€we€have€put€on€the€agenda.Ì€€€€€€€€Does€anybody€think€that€the€preambles€have€beenÌeffective€in€reducing€the€incidence€of€unauthorizedÌcalls,€by€minors€especially,€and€are€there€other€ways€toÌensure€or€other€measures€that€could€be€taken€to€reduceÌthe€incidence€of€unauthorized€calls?Ì€€€€€€€€MS.€HARRINGTON:€€Kim?Ì€€€€€€€€MS.€WILLIAMS:€€I€think€as€far€as€preambles€go,€IÌÐ	   	 ì,'2   Ðdon't€know€that€that€really€stops€a€minor€or€very€manyÌminors€from€making€the€calls.€€I€think€it€probablyÌdepends€on€the€service€being€offered,€and,€you€know,€ifÌthey€want€to€get€to€it€bad€enough,€they€are€going€toÌmake€the€call€no€matter€what€the€recording€says.Ì€€€€€€€€I€think€900€blocking€has€been€effective€inÌreducing€the€calls€from€minors,€and€I€think€many€peopleÌhave€taken€advantage€of€that.€€Whether€they€might€thinkÌthey€want€to€call€a€900€number€sometime€or€not,€probablyÌtheir€concern€of€their€kids€reaching€things€they€don'tÌwant€them€to€was€a€greater€concern,€so€they€subscribedÌto€it€anyway.Ì€€€€€€€€MS.€HARRINGTON:€€Jon?Ì€€€€€€€€MR.€SHAUB:€€Just€a€bit€information€relating€toÌAlbe's€comments€a€little€while€ago€about€what€seems€toÌbe€an€inconsistency€in€agreement.€€The€complexity€existsÌthat€there€is,€in€fact,€an€inconsistency.€€There€areÌnine€states€where€the€PSC€has€a€stricter€rule,€andÌFlorida€is€one€of€those.€€So,€in€fact,€AT&T€or€the€LECÌor€any€billing€entity,€if€they€were€aware€of€those€laws,Ìthey€would€treat€those€differently€in€Florida.Ì€€€€€€€€MS.€HARRINGTON:€€Thank€you,€Jon.Ì€€€€€€€€Don?Ì€€€€€€€€MR.€KLUG:€€In€response€to€Marianne's€questions,ÌI€think,€again,€this€is€anecdotal,€but€I€think€preamblesÌÐ	   	 ì,'2   Ðhave€helped€unauthorized€calls€at€the€margins.€€I€agreeÌwith€Kim.€€If€there€is€an€adolescent€who€wants€to€make€aÌ900€call€and€his€parents€aren't€around€or€her€parentsÌaren't€around,€it's€certainly€not€going€to€prevent€them,Ìbut€I€think€it€helps,€and€I€do€agree€that€blocking€isÌthe€--€absolutely€a€much€more€effective€way.Ì€€€€€€€€MS.€HARRINGTON:€€Linda?Ì€€€€€€€€MS.€GOLDSTEIN:€€I'm€just€going€to€make€oneÌcomment€and€also€respond€to€the€minors€issue,€that€--Ìand€I€think€this€will€probably€be€a€segue€to€the€nextÌsection,€but€I€think€what€has€really€come€through€veryÌclearly€in€these€discussions€is€that€there€really€is€aÌbright€line,€I€think,€that€can€be€drawn€between€phantomÌbilling,€as€we€have€now€defined€it,€and€unauthorizedÌcalls,€and€what€that€also€goes€to,€to€some€extent,€IÌthink,€is€the€culpability€of€the€party€that's€tied€toÌthose€two€types€of€occurrences.Ì€€€€€€€€Phantom€billing,€as€we€have€now€--€is€pureÌfraud,€and€whether€--€I€don't€know€that€we€can€talkÌabout€whether€we€want€to€have€additional€protections€toÌtarget€that,€but€there€certainly€is€the€mechanism€nowÌunder€current€law€to€proceed€against€phantom€billing.€€IÌmean,€irrespective€of€TDDRA,€charging€people€for€goodsÌor€services€that€were€never€delivered€is€plain€andÌsimple€fraud.ÌÐ	   	 ì,'2   Ð€€€€€€€€MS.€HARRINGTON:€€There€is€a€remedy€in€the€law€orÌit€says€if€we€know€about€it,€and€I€would€raise€a€quickÌquestion€for€the€carriers€and€others€to€think€about,€andÌthat€is€whether€there€is€more€that€you€could€do€to€letÌus€know€about€this€when€you€know€of€it€and€whether,€inÌfact,€the€rule€ought€to€require€some€reporting,€twoÌseparate€questions,€or€the€FCC's€rule.Ì€€€€€€€€Go€on,€Linda.Ì€€€€€€€€MS.€GOLDSTEIN:€€And€what€really€jumps€out€at€meÌin€terms€of€the€discussion€of€the€unauthorized€chargesÌis€that€that's€something€that's€occurring€in€theÌperson's€household.€€It's€an€unfortunate€occurrence,€andÌI'm€not€suggesting€it's€something€that€shouldn't€beÌaddressed,€but€there€is€nothing€specific€that€theÌinformation€provider€is€doing€to€encourage€that.€€ThereÌis€something€that€is€happening€within€the€household,Ìeither€in€terms€of€the€direction€that's€been€given€orÌthe€freedom.Ì€€€€€€€€You€know,€I€was€struck€by€the€comment€that€theÌtwo€most€common€instances€that€the€attorneys€general€areÌseeing€of€unauthorized€calls€is,€one,€relating€toÌchildren€which€is,€you€know,€a€problem€that€is€notÌunique€to€900€but€we're€seeing€the€same€issue€in€theÌonline€context,€but€secondly€being€people€who€may€go€onÌvacation€and€leave€someone€to€watch€their€house.€€IÌÐ	   	 ì,'2   Ðmean,€that€certainly€jumps€out€at€me€as€a€prime€exampleÌof€something€that€should€not€really€be€the€informationÌprovider's€responsibility,€nor€do€I€think€the€IP€shouldÌbe€faulted€because€someone€leaves€their€home€in€theÌhands€of€someone€who€likes€to€kind€of€run€up€all€kindsÌof€charges.Ì€€€€€€€€The€second€point€I€just€wanted€to€make€on€theÌminors€issue,€I€don't€really€have€any€data€to€indicateÌto€what€extent€the€preamble€has€helped,€but€I€do€knowÌthat€on€a€number€of€programs,€particularly€in€theÌsweepstakes€area€where€there€are€also€state€prohibitionsÌon€often€those€programs€to€children,€one€of€the€thingsÌthat€has€been€affected€is,€while€it€can't€be€done€in€theÌpreamble,€because€the€preamble€is€passive,€is€shortly€--Ìalmost€immediately€into€the€call€is€to€ask€the€caller€toÌindicate€their€specific€date€of€birth,€and€that€willÌcause€people€who€may€really€not€be€of€age€to€perhapsÌtrip€up€on€providing€that€information,€and€at€least€theÌcall€can€be€kept€to€a€lower€charge€than€might€otherwiseÌhappen,€so€the€charge€is€reduced€and€the€call€can€beÌterminated€sooner.Ì€€€€€€€€MS.€HARRINGTON:€€Peter?Ì€€€€€€€€MR.€BRENNAN:€€Thank€you.Ì€€€€€€€€On€the€subject€of€children€and€preambles,€theÌpreamble€is€problematic,€and€as€one€of€the€companies€whoÌÐ	   	 ì,'2   Ðwas€offering€preamble€since€we€began€business€in€1989,Ìbefore€TDDRA€even€thought€about€it,€the€preamble€in€theÌTDDRA€has€caused€us€--€has€caused€us€difficulty€in€termsÌof€a€clear€message€to€younger€consumers.Ì€€€€€€€€The€specific€statute€requires€that€--€that€theÌphrase,€the€parental€admonition,€be€included€in€everyÌpreamble€and€says€that€you€must€tell€consumers€if,€youÌknow,€if€you€are€under€18€years€old,€you€must€haveÌparental€permission.Ì€€€€€€€€Well,€those€of€us€who€offer€services€for€adultsÌ--€not€indecent€service,€please,€for€adults€--€likeÌresumes,€where€we€don't€want€people€to€use€the€servicesÌwho€are€under€18,€would€prefer€to€be€able€to€say,Ìplease,€if€you€are€under€18,€hang€up€the€phone€now.ÌAnd,€in€fact,€now€what€we€are€left€with€is€a€situationÌwhere€we€have€to€say€both,€because€the€law€requires€oneÌthing,€and€our€policy€requires€another,€and€it's€a€--Ìit's€a€confusing€message.€€And€so€we€are€--€we€areÌhopeful€that€perhaps€one€upshot€of€this€meeting€will€beÌfor€us€to€go€--€all€go€arm€to€arm€and€ask€the€CongressÌto€make€the€change€in€the€law€that€would€clear€this€--Ìthis€area€up.Ì€€€€€€€€MS.€HARRINGTON:€€All€right,€we€are€two€minutesÌoverdue€for€our€break,€but€we€are€going€to€finish€withÌthe€people€who€are€up.€€Adam€has€a€question,€Alan€andÌÐ	   	 ì,'2   ÐKim,€and€then€we€will€take€a€quick€break.Ì€€€€€€€€MR.€COHN:€€I€had€two€questions€about€some€thingsÌthat€were€just€stated.€€One€was€about€the€taping,€youÌmentioned€the€taping€of€someone€saying€their€age€orÌtheir€date€of€birth.Ì€€€€€€€€How€feasible€would€that€be€to€have€in€a€largerÌnumber€of€pay-per-call€services?€€It€seems€that€thisÌmight€be€a€good€way€of€settling€the€argument€between€aÌconsumer€who€says€that€the€call€was€unauthorized€and€anÌinformation€provider€saying€it€was€authorized.€€HowÌfeasible€would€it€be€to€have€a€recording?€€I€know€someÌservices€already€do€record€voices.€€Maybe€that€wouldÌdiscourage,€as€you€said,€further€unauthorized€calls.€€AÌchild€might€be€less€willing€to€put€their€voice€on€tapeÌand€think€that€their€parents€might€hear€them€later.Ì€€€€€€€€MS.€HARRINGTON:€€Did€you€mean€on€tape,€Linda,€orÌ--Ì€€€€€€€€MS.€GOLDSTEIN:€€No,€I€was€not€--€I€want€toÌclarify€for€the€record€that€I€was€not€--€I€was€notÌreferring€to€taping€there.€€I€was€referring€merely€toÌthe€request€for€that€information,€and€in€theÌapplications€that€I'm€referring€to,€it€is€done€by€--€byÌinputting€on€the€touch€tone,€but€what€it€does€do€is€atÌleast€screen€out€some€calls€very€early€in€the€call€whereÌthe€person€has€not€input€the€data€that€would€correspondÌÐ	   	 ì,'2   Ðto€the€correct€--Ì€€€€€€€€MR.€COHN:€€I€apologize,€I€misunderstood,€but€IÌguess€my€question€is€how€feasible€would€it€be€--Ì€€€€€€€€MS.€GOLDSTEIN:€€And€it's€a€valid€question,€but€IÌdon't€feel€qualified€to€answer€that€question.Ì€€€€€€€€MS.€HARRINGTON:€€But€I'll€bet€Gary€is.Ì€€€€€€€€MR.€PASSON:€€I'm€Gary€Passon,€again.Ì€€€€€€€€A€number€of€companies€do€use€recordedÌtransactions€of€the€first,€you€know,€30€seconds€or€oneÌminute€of€a€call.€€Obviously€there€is€an€economicsÌissue.€€If€you€only€have€a€50€cent€call€or€a€$2€call,Ìit's€probably€not€very,€you€know,€economically€feasibleÌto€maintain€a€tape€of€the€transaction€for,€you€know,€forÌthat€kind€of€transaction,€but€if€it€were€deemed€thatÌthat€would€help€resolve€these€issues€and,€you€know,€andÌtake€a€lot€of€the€--€and€remove€a€lot€of€the€"denies€allÌknowledge"€and€move€them€into€the€case€of€I€acceptÌknowledge€and€I€accept€responsibility,€then€I€think€it'sÌsomething€that,€you€know,€I'm€sure€the€industry€would€beÌvery€interested€in€looking€at.Ì€€€€€€€€MS.€HARRINGTON:€€All€right,€Kim,€Alan,€and€thenÌthe€last€word€to€Susan,€and€we€are€going€to€take€a€quickÌbreak.Ì€€€€€€€€MS.€WILLIAMS:€€A€quick€word€on€the€taping€ofÌcalls.€€I€know€--€I€believe€it's€used€today€quite€a€bitÌÐ	   	 ì,'2   Ðby€companies,€but€not€900€providers,€more€the€voicemail,Ìthe€800,€the€international,€and€I€think€that€it's€usedÌmore€often€than€not,€and€users€feel€they€are€beingÌstrong€armed€into€paying€for€things€when€truly€there€wasÌno€valid€presubscription€arrangement€just€because€youÌcaught€my€kid€on€tape€saying€his€name,€but€yet€I€thinkÌconsumers€are€being€led€to€believe€that€because€theyÌhave€got€a€child's€voice€or€somebody's€voice€on€tape€inÌtheir€home€that€that€means€they€have€to€pay€for€theirÌcall,€and€that€is€my€concern,€that€people€are€using€thatÌin€a€wrong€way€that€doesn't€make€it€a€validÌpresubscription€arrangement.€€In€fact,€it€proves€thatÌthe€subscriber€on€the€phone€didn't€authorize€the€call€ifÌit's€not€the€subscriber's€voice€on€the€phone.Ì€€€€€€€€MS.€HARRINGTON:€€Alan?Ì€€€€€€€€MS.€WILLIAMS:€€I€was€just€going€to€make€a€coupleÌother€comments€real€quick.Ì€€€€€€€€MS.€HARRINGTON:€€Sure,€go€ahead.Ì€€€€€€€€MS.€WILLIAMS:€€As€far€as€I€wanted€to€addressÌback€the€treatment€and€collections€process€that€youÌtalked€about€before€and€the€timing€issues€and€thingsÌlike€that.€€Certainly€once€we€send€a€bill€out,€thatÌcustomer€has€got€at€least€30€days€to€pay€that€bill.ÌWhen€payment€isn't€received,€depending€on€our€regulatoryÌrequirements€in€certain€states€and€the€customer's€creditÌÐ	   	 ì,'2   Ðrating€with€us,€we€start€an€action€once€there€is€aÌbalance€due,€meaning€a€notice€on€his€next€bill€firstÌthat€says,€you€know,€your€charges€aren't€paid.€€We€don'tÌ--€at€least€in€Southwestern€Bell,€I€can't€speak€forÌanyone€else€--€we€don't€at€that€point€say€deniable€orÌnondeniable€charges,€we€just€say€that€there€is€a€balanceÌdue€that€you€owe€on€the€bill,€and€that€whole€process€canÌrun€out€for€quite€a€long€time€before€something€is€paid.Ì€€€€€€€€We€started€a€process€with€nondeniable€chargesÌfor€customers€who€hadn't€called€us€that€said€if€we€areÌgoing€to€send€this€guy€a€letter€if€he€is€not€calling€us,Ìand€we€have€got€so€much€900€that€that's€the€only€thingÌthat€he's€deniable€for€or,€you€know€--€not€deniable,€butÌI€mean€that€he€owes€us€that€throws€him€into€treatment,Ìand€we€send€letters€to€customers€saying€are€you€callingÌus€or€not,€are€you€not€paying€your€900,€call€us€and€letÌus€know,€what€is€it€you€are€not€paying€here?€€If€you€areÌdisputing€charges,€you€need€to€tell€us.€€So,€that€stillÌtakes€you€pretty€far€out€into€that€60€days€you'reÌtalking€about,€depending€on€the€cycle,€at€least€60Ìdays.Ì€€€€€€€€MS.€HARRINGTON:€€It€sounds€like€everybody€is€inÌphone€therapy.€€What€is€treatment?Ì€€€€€€€€MS.€WILLIAMS:€€Oh,€treatment,€I€just€figuredÌeverybody€knew€that€term.€€Treatment€is€when€you€areÌÐ	   	 ì,'2   Ðtrying€to€get€a€bill€paid.€€So,€when€you€are€collecting,Ìtreatment€in€collections,€you€are€treating€an€account€byÌtrying€to€get€payment€on€an€account.€€So,€there€are€lotsÌof€processes€that€we€go€through€to€try€to€get€a€billÌpaid€that€the€60€days€that€obviously€was€something€thatÌwe€don't€appear€to€be€following,€you€know,€is€--€you€areÌway€into€that€and€past€that€in€some€cases,€depending€onÌhow€long€that€customer€has€had€service€and€how€good€hisÌrating€is.Ì€€€€€€€€And€a€point€I€made€on€a€break€to€somebody€is€IÌbelieve€what€the€rule€talks€about€is€when€there€is€aÌbilling€error.€€Well,€some€customers,€there€is€no€error,Ìthey€just€refuse€to€pay,€and€that's€where€we€get€back€toÌthat€situation€of€what€do€we€do€with€that€charge€at€thatÌpoint.Ì€€€€€€€€MS.€HARRINGTON:€€Treatment.Ì€€€€€€€€MS.€WILLIAMS:€€Treatment.Ì€€€€€€€€MS.€HARRINGTON:€€Alan?Ì€€€€€€€€MR.€TAYLOR:€€Just€briefly,€I€wanted€to€clarifyÌfor€anyone€who€may€have€misunderstood,€I€think,€in€ourÌcomments,€there€are€certainly€examples€where€no€homeÌsitter€was€left€in€charge€of€the€house€while€the€folksÌwere€away.€€We€have€examples€of€calls€where€--€to€theÌowners€no€one€was€authorized€to€be€in€the€home€at€theÌtime€and,€in€fact,€should€not€have€been€in€the€home€atÌÐ	   	 ì,'2   Ðthe€time.Ì€€€€€€€€Also,€I€want€to€point€out€that€in€my€experience,ÌI€haven't€had€really€occasion€to€question€a€bill€thatÌAT&T€or€MCI€have€rendered.€€It's€typically€been€otherÌproviders.€€With€respect€to€--€I€know€of€no€one,Ìindustry€or€otherwise,€who€is€actually€willing€or€hasÌput€together€whether€the€call€really€was€dialed€as€it'sÌshown€on€the€bill€and€followed€through€the€process.€€IÌhave€done€that,€there€is€an€example€in€the€comments.€€IÌdon't€think€consumers€have€the€ability€to€call€up€theÌlocal€telephone€company€and€ask€them€to€do€that€forÌthem,€at€least€I€am€certainly€not€aware€of€anybodyÌhaving€that€done€for€them.Ì€€€€€€€€MS.€HARRINGTON:€€All€right,€now,€our€scheduleÌsays€we€are€going€to€have€a€short€break€at€2:30€and€thenÌa€real€break€at€3:15.€€The€bad€news€is€that€the€coffeeÌis€not€ready€yet€for€the€short€break.€€So,€what€I'mÌwondering€is€whether€we€should€just€plow€on€throughÌhere,€we€could€stand€up€for€a€minute€and€stretch€and€sitÌright€back€down€and€continue€so€that€we€could€have€aÌreally€great€coffee€break€at€3:15,€my€personalÌpreference,€or€--Ì€€€€€€€€MR.€TAYLOR:€€You€have€got€my€vote,€MadamÌChairman.Ì€€€€€€€€MS.€HARRINGTON:€€But€you€won't€get€called€on.ÌÐ	   	 ì,'2   ÐLet's€stand€up€for€a€second€and€then€sit€right€backÌdown.Ì€€€€€€€€òò(Pause€in€the€proceedings.)Ð   	 ü    Ðóó€€€€€€€€MS.€HARRINGTON:€€All€right,€let's€refocus.Ð   	 Œ
°   ÐWe're€talking€about€chargeback€issues€and€billing€issuesÌfrom€the€consumer€perspective.€€There€was€a€point€madeÌearly€on€by€Susan€Grant€about€the€difficulty€that€someÌconsumers€claim€to€have€when€they€ask€for€aÌre-investigation€of€charges.€€They€are€unable€to€obtainÌdocumentation.Ì€€€€€€€€I€would€note€that€when€the€Âé¶¹´«Ã½€TradeÌCommission€staff€recommended€that€the€rule€includeÌbilling€dispute€resolution€provisions€similar€to€thoseÌin€the€credit€card€statutes,€I€think€we€probably€had€inÌmind€that€this€should€work€pretty€much€like€the€creditÌcard€billing€dispute€procedure€to€the€extent€possible,Ìunderstanding€that€there€aren't€necessarily€records€fromÌtransactions€that€are€as€easily€available€in€theÌtelephone€context€as€they€are€in€the€retail€salesÌcontext.Ì€€€€€€€€But€I'd€like€to€focus€us€now€on€the€lastÌquestion€on€page€2,€are€billing€entities€adequatelyÌcomplying€with€the€requirement€to€conduct€reasonableÌinvestigation€of€an€alleged€billing€error,€as€isÌrequired€in€the€rule?€€If€they€are,€do€we€needÌÐ	   	 ì,'2   Ðadditional€procedures?€€If€they€are€not€or€if€they€are,Ìhow€is€it€that€the€re-investigation€procedures€are€beingÌused€and€what€steps€are€included€in€those?Ì€€€€€€€€We€would€like€to€have€some€discussion€here,Ìagain,€about€investigation,€not€treatment,€and€as€myÌcolleague€Allen€observes,€the€role€is€recovery.€€So,€ifÌwe€could€talk€about€investigation€activities€rather€thanÌcollection€activities,€I€think€that's€an€importantÌdistinction.€€And€are€there?€€We€would€be€curious€toÌknow€whether€there€are€actual€investigation€proceduresÌthat€are€being€used€by€billing€entities.Ì€€€€€€€€MS.€WILLIAMS:€€Is€that€me?Ì€€€€€€€€MS.€HARRINGTON:€€Actually,€Don,€I€told€you€youÌwould€have€the€first€word€this€session,€because€you€wereÌwaiting€from€last€or€prebreak,€so€why€don't€you€beginÌand€then€we€will€go€to€Walt€and€then€Alan.€€We€will€hearÌfrom€these€providers€first.Ì€€€€€€€€MR.€KLUG:€€Within€the€past€few€years,€there€hasÌbeen€somewhat€of€an€innovation€in€terms€of€investigationÌof€calls€that€consumers€claim€they€didn't€make€or€wereÌunauthorized,€and€it's€been€described€in€various€ways€asÌvoice€recording,€voice€capture,€voice€print,€and€the€wayÌit€works€is€the€information€provider€will€record€a€fewÌsnippets€of€a€conversation.€€If€it's€a€psychicÌapplication,€sometimes€they€will€ask€the€caller€forÌÐ	   	 ì,'2   Ðtheir€birth€sign€or€birthday.€€If€it's€a€voice€personalsÌapplication,€they€may€ask€for€their€first€name.Ì€€€€€€€€MS.€HARRINGTON:€€Do€they€tell€consumers€thatÌthey€are€making€a€recording?Ì€€€€€€€€MR.€KLUG:€€It€is€usually€done€in€the€context€ofÌthe€application.€€I€mean,€it's€information€needed€toÌcomplete€the€call.€€In€other€words,€if€it's€a€psychicÌreading,€I€would€have€to€ask€your€birth€sign€to€do€aÌproper€reading.Ì€€€€€€€€MS.€HARRINGTON:€€Do€consumers€know€that€it'sÌbeing€recorded?Ì€€€€€€€€MR.€KLUG:€€I€don't€know€that€or€not.€€I€don'tÌknow€that.Ì€€€€€€€€MS.€HARRINGTON:€€Okay.Ì€€€€€€€€MR.€KLUG:€€If€they€do€or€not,€but€what€happensÌthen€is€when€the€consumer€would€call€the€billing€entityÌand€say,€well,€Gee,€that€wasn't€me€or€I€didn't€make€theÌcall,€then€they€can€bridge€on€the€information€provider'sÌsystem€and€key€in€the€ten-digit€ANI€and,€you€know,€backÌwill€come€a€recording€of€a€Scorpio€or€Don€or€whatever,Ìand€they€say,€Well,€do€you€recognize€that€voice?€€And€inÌmany€cases,€in€most€cases,€Oh,€yeah,€I€remember€makingÌthat€call,€that€was€my€son€or€whatever.€€So,€it's€aÌuseful€way€to€help€sustain€charges€or€to€unsustainÌcharges,€as€the€case€may€be.ÌÐ	   	 ì,'2   Ð€€€€€€€€MS.€HARRINGTON:€€Walt?Ì€€€€€€€€MR.€STEIMEL:€€Thank€you,€yeah,€I'd€like€toÌfollow€up€on€that.Ì€€€€€€€€We€take€voice€prints€at€almost€every€singleÌbilling€event.€€The€voice€prints€are€either€done€throughÌa€specific€notification€that€one's€voice€print's€beenÌtaken€or€by€using€the€FCC-required€beep€tone.€€And€thenÌduring€the€investigation€of€call€records,€that€is€playedÌback,€a€subscriber's€call€to€the€line,€that's€playedÌback.Ì€€€€€€€€If€a€subscriber€denies€all€knowledge€of€theÌvoice,€then€that's€the€end€of€the€investigation.€€If€theÌsubscriber€identifies€that€another€party€is€responsibleÌfor€the€voice,€then€investigation€may€continue€into€whoÌthat€person€was€and€redirecting€billing€to€the€properÌparty,€but€voice€printing€can€be€a€very€valuable€tool€inÌquickly€and€easily€settling€investigational€complaints,Ìespecially€when€it's€during€the€call.Ì€€€€€€€€The€other€thing€is€most€carriers,€and€PilgrimÌcertainly€does,€keeps€all€of€the€call€records€off€of€itsÌswitch.€€So,€in€addition€to€the€voice€print€checking,Ìvoice€print€verification,€you€can€also€check€callÌrecords€to€see€when€calls€originated,€where€theyÌoriginated€from.€€This€is€especially€important€whenÌyou're€dealing€with€calling€cards,€because€calling€cardsÌÐ	   	 ì,'2   Ðare€supposed€to€be,€by€statute,€an€identifier€that'sÌunique€to€the€individual€that€bills€back€to€the€callingÌcard€location€regardless€of€where€you€actually€make€theÌcall€from.Ì€€€€€€€€And€in€verifying€calling€card€traffic,€you€canÌlook€back€in€the€call€records,€see€where€the€callÌoriginated€from€and€when€the€calling€card€was€originallyÌissued€and€verify€that€it€was€issued€to€the€numberÌthat's€being€charged€back€to,€see€where€it's€being€usedÌat€points€in€the€future,€and€sometimes€that€can€helpÌtrack€down€fraud€and€verify€that€there€has€been€an€eventÌof€fraud€that€has€taken€place,€that€the€call€wasÌunauthorized€and€some€other€party€might€be€liable€forÌthese€charges.Ì€€€€€€€€Before€I€finish,€right€after€lunch€I'm€a€littleÌbit€slow€sometimes,€and€we€were€talking€about€phantomÌbilling.€€I€have€two€statements.€€One,€a€question€forÌAT&T,€in€the€context€of€what€I€understood€we€wereÌdefining€phantom€billing€as,€in€the€first€segment€afterÌlunch,€AT&T€normally€charges€for€teleconferencing€andÌsome€of€the€telemessaging€purposes€on€the€700€exchange,Ìeven€though€you€cannot€dial€a€700€number€from€anythingÌexcept€on€AT&T€dial€tone€derived€from€presubscription€orÌ10XXX€dialing.Ì€€€€€€€€That€does€not€seem€to€me€to€be€a€phantomÌÐ	   	 ì,'2   Ðbilling,€when€you€put€in€an€internal€routing€networkÌcode€to€the€service€rather€than€a€POTS-based€dialedÌnumber,€that€does€not€seem€to€be€phantom€billing.ÌThat's€an€identifier€to€the€service€that€you'veÌpurchased€rather€than€number€dialing.Ì€€€€€€€€And€secondly,€most€LECs€do€not€permit,€to€theÌextent€that€you€get€into€any€kind€of€information€serviceÌplatform,€by€dialing€an€800€number,€most€LECs€and€mostÌbilling€engines€--€most€billing€factors€do€not€permitÌyou€to€populate€the€dial-to€field€with€an€800€numberÌwhen€you€have€anything€other€than€--€what's€it€called,Ìthe€record€--€EMI€--Ì€€€€€€€€MS.€WILLIAMS:€€A€16€record?Ì€€€€€€€€MR.€DICHTER:€€4250?Ì€€€€€€€€MR.€STEIMEL:€€2450,€when€you€are€using€any€kindÌof€information€service€or€pay-per€call€record€--Ìactually,€I€don't€think€you€can€ever€populate€theÌdial-to€field€with€an€800€number,€but€--Ì€€€€€€€€MS.€HARRINGTON:€€Walt,€you're€a€lawyer?Ì€€€€€€€€MR.€KLUG:€€Jargon€alert.Ì€€€€€€€€MR.€STEIMEL:€€It€has€to€do€with€you€cannot€putÌan€800€number€in€the€dial€to€when€you're€generating€aÌbill€to€the€client.€€You€just€can't€do€it.€€AT&T€forÌteleconferencing€has€to€put€a€700€number€in.€€SometimesÌPilgrim€puts€a€700€number€in.€€I€don't€think€any€ofÌÐ	   	 ì,'2   Ðthose€events€create€phantom€billing.€€I€think€phantomÌbilling€is€properly€when€someone€is€just€generating€callÌrecords€that€were€never€dialed,€which€does€happen€on€theÌnetwork€sometimes,€sometimes€on€mistake,€more€often€byÌ--€on€purpose.Ì€€€€€€€€MS.€HARRINGTON:€€All€right,€now,€to€translateÌthat,€Kim?Ì€€€€€€€€MS.€WILLIAMS:€€Well,€I€think€when€we're€talkingÌabout€the€800€billing€and€what€can€and€can't€be€put€onÌan€EMI€record,€which€is€one€of€these€records€that€--Ì€€€€€€€€MS.€HARRINGTON:€€EMI€stands€for?Ì€€€€€€€€MS.€WILLIAMS:€€Exchange€message€interface,€andÌthat's€the€industry€standard€record,€there€is€someÌdifferent€kinds.Ì€€€€€€€€MR.€HERTZENDORF:€€Exchange€--€it's€an€industryÌbilling€record?Ì€€€€€€€€MS.€WILLIAMS:€€It's€a€standardized€record€forÌthe€whole€industry€for€billing.€€We€use€certain€EMIÌrecords€for€certain€types€of€billing.€€Southwestern€BellÌnever€did€permit€an€800€number€in€a€two-number€field,Ìbecause€there€usually€was€no€charge€to€call€an€800Ìnumber.€€Once€we€got€into€800€pay-per-call,€we€opened€upÌour€16€record€and€said€if€you€are€going€to€bill€800€pay-Ìper-call,€we€want€it€on€this€record,€so€it€is€identifiedÌwith€the€correct€to-number€in€it€for€the€end€user.ÌÐ	   	 ì,'2   Ð€€€€€€€€MR.€HERTZENDORF:€€What's€a€to€number?Ì€€€€€€€€MS.€WILLIAMS:€€To€number,€T€O.Ì€€€€€€€€MR.€DICHTER:€€Number€called.Ì€€€€€€€€MS.€WILLIAMS:€€Some€LECs€chose€not€to€bill€800Ìat€all,€and€that's€why€they€don't€allow€800€in€the€toÌfield.€€That€doesn't€mean€that€they€allow€you€to€putÌsome€other€number€in€there€because€an€800€was€dialed.ÌThey€don't€allow€billing€of€800€calls.€€We€only€allowedÌit€on€that€record,€and€if€that's€the€call€that€was€made,Ìthat's€what€the€call€had€to€look€like.Ì€€€€€€€€When€a€number€is€really€going€to€a€number€inÌBoston,€it€should€be€the€Boston€number€showed€up€on€theÌbill,€not€some€other€number€or€a€900€number.€€When€a€900Ìnumber€is€dialed,€that's€the€number€we€expect€to€show€upÌon€the€bill.€€The€conference€service€that€AT&T€provides,Ìwe€have€talked€to€them€about€that€before,€that's€notÌreally€a€pay-per-call€or€information€service,€not€a€chatÌline€or€any€of€those€things,€it's€teleconferencing,€andÌI€think€that's€kind€of€a€different€animal€and€not€partÌof€this€discussion.Ì€€€€€€€€MS.€HARRINGTON:€€Adam,€a€question?Ì€€€€€€€€MR.€COHN:€€This€is€very€tricky.€€When€you€saidÌwhat€EMI€stands€for,€I€heard€some€other€mumbling€thatÌsaid€something€else,€electronic?Ì€€€€€€€€MS.€WILLIAMS:€€Is€it€electronic?€€ExchangeÌÐ	   	 ì,'2   Ðmessage,€I€think.€€It's€an€electronic€way€of€exchangingÌthose€messages,€but€I€think€it's€exchange€--€is€thatÌright?Ì€€€€€€€€MR.€KLUG:€€Let's€vote.Ì€€€€€€€€MR.€HERTZENDORF:€€Let's€define€it€here.Ì€€€€€€€€MS.€HARRINGTON:€€Okay,€Susan.Ì€€€€€€€€MS.€GRANT:€€I€wanted€to€point€out€that€we€get€aÌnumber€of€complaints€from€people€about€the€voice€taping,Ìthat€when€they€are€questioning€the€charges€and€a€tape€isÌplayed€for€them,€they€say€that€it's€not€them€or€anybodyÌin€their€household,€and€it€may€be€that€in€some€cases€theÌinformation€provider€is€just€pulling€a€tape€out€of€theÌstack€and€putting€it€in€a€machine€to€play€for€them€withÌthe€intention€of€making€them€feel€as€they€report€to€usÌthey€feel€like€they€have€no€way€out,€like€they€areÌreally€boxed€into€paying€for€these€charges€that€theyÌshouldn't€have€incurred.Ì€€€€€€€€MS.€HARRINGTON:€€Gary?Ì€€€€€€€€MR.€PASSON:€€I€think€back€on€the€--€well,€IÌguess€back€a€little€portion€here,€which€is€what€thingsÌcan€be€done€to€do€reasonable€investigation,€and€I€think,Ìyou€know,€voice€taping€is€something€that€we€brought€upÌand€I€think€we€talked€about,€and€I€would€like€to€addressÌSusan's€comment€in€just€a€second€on€that,€but€really€atÌthe€core€of€that€is€what€Kim€talked€about,€is€really€theÌÐ	   	 ì,'2   Ðoriginal€information€that's€in€the€central€office.€€YouÌknow,€that's€really€something€that's,€you€know,€not€--Ìit's,€you€know,€it's€not€modifiable€by€anybody.€€I€mean,Ìit€truly€is€a€fingerprint€of€what€happened€in€thatÌtransaction.Ì€€€€€€€€Many,€many€transactions,€as€we€are€talking€aboutÌhere€900,€there€is€really€--€that€is€an€extremelyÌaccurate€representation€of€what€happened.€€It's€going€toÌbe€a€little€bit€shorter€than€the€IXEs,€because€it€wasÌprocessed€in€before€the€IXE€touched€it,€but€it€is€aÌvery,€very€accurate€thing.€€As€we€get€to€these€otherÌareas€of€alternative€billing€and€alternative€dialingÌplans€and€that€kind€of€stuff,€that€information€gets€lessÌand€less€useful,€but€as€it€relates€to€900,€I€think€it€isÌvery€valuable.Ì€€€€€€€€What€doesn't€exist€at€this€point€in€my€mind€is€aÌprocess€by€which€the€IP€or€the€billing€aggregater€canÌrequest€that€information€to€validate€whether€or€not€theÌtransactions€that€they€are€trying€to€do€research€on,€inÌfact,€matches€an€actual€physical€transaction€on€theÌphone€itself.€€I€think€with€the€combination€of€voiceÌprint€and€a€record€from€the€local€exchange€carrier€thatÌthis€transaction€was€accomplished€on€that€physicalÌtelephone€at€such€and€such€a€date€and€time,€you€reallyÌnarrow€down€the€cases€where€--€where€it's€disputable,ÌÐ	   	 ì,'2   Ðbecause€now€what€you're€really€requiring€is€someone€toÌget€physical€access€either€to€the€inside€of€the€house€orÌto,€as€Albe€mentioned€earlier,€to€the€physical€equipmentÌon€the€outside€of€the€house€to€do€clip-on€fraud.€€YouÌhave€really€narrowed€the€cases€down,€assuming€the€voiceÌprint€is€someone€in€that€family.Ì€€€€€€€€MS.€HARRINGTON:€€Albe?Ì€€€€€€€€MR.€ANGEL:€€I€wanted€to€make€clear€that€from€anÌinformation€provider€standpoint,€we€don't€require€thatÌan€investigation€be€made.€€If€it's€a€bold€statement€thatÌI€can€offer€up,€if€the€local€exchange€carrier€or€theÌinterexchange€carrier€were€merely€to€refund€the€chargesÌand€pass€that€information€on€to€us,€we€might€be€betterÌserved€than€if€they€had€an€investigation€that€delayedÌinformation€to€us€on€nonpayment.Ì€€€€€€€€MS.€HARRINGTON:€€Don?Ì€€€€€€€€MR.€KLUG:€€I€was€just€going€to€reply€to€Susan'sÌcomment€about€voice€capture,€and€I€don't€think€theÌinformation€providers€just€kind€of€willy-nilly€just€tryÌand€pick€something€out€to€try€to€badger€the€customer€toÌpay,€and€I€think€in€my€experience€it's€a€tool€that'sÌlegitimately€used.€€If€there€are€circumstances€whereÌcustomers€feel€that's€happening,€we€would€sure€like€toÌknow€about€them€so€we€can€pursue€that€with€ourÌcustomers.ÌÐ	   	 ì,'2   Ð€€€€€€€€MS.€HARRINGTON:€€Alan?Ì€€€€€€€€MR.€TAYLOR:€€Yes,€just€going€to€the€basicÌquestion€about€the€information€provider€doing€aÌreasonable€investigation,€we€encounter€much€the€sameÌproblem€that€the€consumer€or€subscriber€does€in€that,Ìyou€know,€when€we€receive€a€complaint,€you€know,€we€canÌgo€ask€the€LEC€about€it,€and€they€can€refer€us€to€theÌlong€distance€carrier,€who€can€then€refer€us€to€theÌinformation€provider,€and€if€all€we€have€is€a€phoneÌnumber€that€never€answers,€we€have€no€way€of€pursuingÌthat.Ì€€€€€€€€It€might€be,€you€know,€it€would€certainly€beÌhelpful€if€somehow€some€list€of€information€providersÌcould€be€made€available€so€states€can€communicate€withÌthem.€€Otherwise,€perhaps€the€FTC€is€willing€to€takeÌsome€--€take€some€of€these€files€and€act€on€them.€€IsÌthat€something€I€should€be€considering€doing€as€far€asÌhow€to€see€whether€a€reasonable€investigation€is€beingÌmade?Ì€€€€€€€€MS.€HARRINGTON:€€You€are€certainly€welcome€toÌsend€us€information.Ì€€€€€€€€MR.€TAYLOR:€€Um-hum,€okay.Ì€€€€€€€€MS.€HARRINGTON:€€Jon,€and€then€Peter.€€I'mÌsorry,€Adam,€do€you€have€a€question€or€can€you€hold€forÌa€minute?ÌÐ	   	 ì,'2   Ð€€€€€€€€MR.€COHN:€€I'll€hold.Ì€€€€€€€€MS.€HARRINGTON:€€Okay.Ì€€€€€€€€MR.€SHAUB:€€Just€a€clarification€as€it€pertainsÌto€AT&T€and€inquiry€investigations.€€The€overwhelmingÌmajority€of€phone€investigations€can€be€carried€out€andÌcompleted€during€one€initial€contact,€which€usuallyÌlasts€five€to€ten€minutes.€€The€information,€the€networkÌevent€tape,€the€rating€information,€the€program€contentÌthat's€being€questioned€is€all€available€online€for€theÌpast€three€billing€cycles.Ì€€€€€€€€So,€a€discussion€can€take€place€and€in€mostÌcases€a€resolution€can€be€reached.€€If€a€person€deniesÌall€knowledge,€we€can€look€back€two€previous€billingÌcycles€and€see€if€that€same€person,€that€sameÌoriginating€phone,€contacts€those€same€numbers€on€aÌrepetitive€basis.€€It's€somewhat€illogical€to€think€thatÌunauthorized€use€would€have€occurred€to€the€same€numberÌagain€in€previous€months,€for€instance.Ì€€€€€€€€The€most€probable€situation€where€anÌinvestigation€couldn't€be€resolved€with€available€dataÌwould€be€if€it€covers€periods€that€are€older€than€threeÌbilling€cycles,€in€which€case€the€data€wouldn't€beÌavailable€immediately.Ì€€€€€€€€MS.€HARRINGTON:€€Peter?Ì€€€€€€€€MR.€BRENNAN:€€Thank€you.ÌÐ	   	 ì,'2   Ð€€€€€€€€In€response€to€that€and,€Alan,€to€your€inquiry,Ìthe€--€it€--€like€it€or€not,€there€are€people€--€thereÌare€consumers€who€abuse€the€process.€€We€know€that,€andÌwe€have€known€that.€€There€are€many€more€consumers,€IÌthink,€though,€who€--€who€call€and€generally,€it€hasÌbeen€our€experience,€and€our€chargebacks€areÌhistorically€fairly€low,€who€--€who€do€understand€andÌwho€all€it€takes€is€to€explain€to€them,€yes,€this€is€aÌcall€to€the€personals€of€the€Tampa€Tribune,€and€theyÌsay,€Oh,€yeah,€that€was€what€it€was.€€I€understand€now,Ìokay?Ì€€€€€€€€It's€--€there€are€--€in€terms€of€theÌidentification€of€the€information€provider,€which€is€theÌissue€that€you€raised,€the€rule€stipulates€that€in€theÌpreamble€message€that€the€--€and€in€advertising€theÌinformation€provider€be€identified.€€That€is€sometimesÌproblematic,€because€we€would€identify€ourselves€as€theÌTPI€Group€or€TPI,€a€service€of€TPI,€because€we€are€theÌcustomer€of€record€for€that.Ì€€€€€€€€It€would€probably€be€better€for€us€to€be€able€toÌsay€The€Tampa€Tribune,€because€somebody€in€Tampa€willÌrecognize€that€they€called€the€service€of€the€TampaÌTribune€and€might€not€recognize€that€they€called€theÌservice€of€TPI.€€So,€there€is€probably€some€housekeepingÌthat€could€be€done€in€that€regard.ÌÐ	   	 ì,'2   Ð€€€€€€€€It's€been€our€experience,€and€our€carrier€is€--Ìthe€vast€majority€of€our€service€is€AT&T,€who€handlesÌits€own€inquiry,€that€many€problems€can€be€worked€out€inÌthe€process€that€Jon€alluded€to,€but€there€is€aÌtimeliness€issue€here,€as€he€adequately€raises.€€So,€oneÌof€the€issues€we€didn't€get€to€this€morning€that€I€wouldÌlike€to€--€we€would€like€to€bang€on€is€that€I€think€weÌshould€require€--€we€should€require€timely€reporting.ÌWe€should€--€the€rule€should€specify€timely€reporting,Ìprompt€reporting€back€to€us€of€consumer€issues,€becauseÌit's€the€only€way€we€can€deal€in€good€faith€with€it.Ì€€€€€€€€MS.€HARRINGTON:€€To€the€IPs.€€Let€me€ask€aÌquestion.€€Why€can't€that€be€dealt€with€in€contracts?ÌWhy€is€that€a€consumer€--€why€is€that€a€consumerÌprotection€issue€rather€than€a€business€protectionÌissue?Ì€€€€€€€€MR.€BRENNAN:€€I'll€toss€it€to€Jon.Ì€€€€€€€€MR.€SHAUB:€€It€is,€in€fact,€dealt€with€inÌcontracts.€€Our€contracts€with€our€customers,€the€IPs€orÌthe€bureaus,€we€do€pass€that€information€back€aboutÌadjustment€or€sustaining€in€the€next€billing€cycle.ÌSpecial€circumstances€or€large€volumes,€we€couldÌaccelerate€that€and€pass€it€back€sooner€by€specialÌarrangement.Ì€€€€€€€€The€difficulty€I€think€comes€in€in€theÌÐ	   	 ì,'2   Ðcontractual€relationships€between€the€billing€entitiesÌand€the€LECs.€€The€LECs€have€to€work,€as€AT&T€does€inÌthe€same€role,€have€to€work€a€balancing€act€between€whatÌconstitutes€good€faith€efforts€in€collections€and€howÌmany€attempts€to€collect€the€money€should€be€made€overÌhow€long€a€period€of€time€before€you€think€you€are€notÌgetting€a€true€statement€of€intent.€€So,€you€know,Ìthat's€a€judgment€call€that€sometimes€is€done€well€andÌsometimes€is€not€done€well.Ì€€€€€€€€MS.€HARRINGTON:€€Let's€hear€from€another€LEC,ÌBarbara.Ì€€€€€€€€MS.€MAJESKI:€€I'm€hearing€conflicting€--Ì€€€€€€€€MS.€HARRINGTON:€€Could€you€use€your€microphone?Ì€€€€€€€€MS.€MAJESKI:€€I've€been€hearing€conflictingÌstatements€here.€€One€on€the€part€of€the€LECs€is€to€getÌthe€charges€back€quickly€and€the€other€is€to€have€theÌLEC€do€a€proper€investigation€before€doing€chargebacks.ÌI€can€tell€you€from€my€company,€when€we€get€a€complaintÌfrom€a€customer,€we€send€the€customer€--€it€depends€onÌwhat€the€customer€is€asking,€if€the€customer€is€saying€IÌdidn't€make€the€calls€or€whether€they€are€charging€--Ìthey€are€asking€about€the€charges€involved€with€theÌcall.Ì€€€€€€€€If€they€are€saying€I€didn't€make€the€call,€ourÌcompany€goes€through€a€specific€checklist€of€things€thatÌÐ	   	 ì,'2   Ðwe€do.€€We€first€check€ANI.€€We€do€a€central€officeÌcheck.€€We€also€do€--€we€send€a€repairman€to€the€home€toÌcheck€the€facilities.€€We€also€check€the€policiesÌleading€into€the€--€into€the€customer's€home.€€WeÌreserve€the€AMA€tapes€for€problem€complaints,€such€asÌthe€phantom€calls.€€As€Kim€said,€those€are€not€kept€asÌlong€as€other€--€other€data,€and€it€--€I€believe€it€isÌan€expensive€process.Ì€€€€€€€€MS.€HARRINGTON:€€Okay,€hold€on€one€second.Ì€€€€€€€€Mark,€we€have€--€we€haven't€heard€much€fromÌeither€Joel€or€Dave€this€afternoon,€and€they€have€bothÌhad€their€cards€up,€and€then€we€are€going€to€come€backÌto€Commission€folks€with€questions,€if€that's€allÌright.Ì€€€€€€€€So,€Dave,€you€first€and€then€Joel.Ì€€€€€€€€MR.€GILLIS:€€One€of€the€points€that€I€wanted€toÌmake€relates€to€the€investigation€that€the€informationÌprovider€ought€to€be€doing€when€they€receive€a€complaintÌfrom€someone€saying€that€the€charges€were€unauthorized,Ìand€that€complaint€probably€is€initiated€by€a€call€toÌthe€number€that€appears€on€the€bill,€and€the€problemÌthat's€reflected€is€that€very,€very€frequently,€peopleÌcan't€get€through,€and€they€--€as€was€mentioned€earlier,Ìthey€have€difficulty€identifying€who€the€providers€are.Ì€€€€€€€€We€don't€see€the€same€sort€of€problem€when€theyÌÐ	   	 ì,'2   Ðare€trying€--€you€know,€with€respect€to€accessingÌinformation€numbers.€€You€don't€have€call€blockingÌthere.€€It€seems€to€me€that€this€is€a€problem€that€theÌindustry€could€really€solve,€either€at€the€carrier€levelÌor€the€LEC€level,€by€requiring€the€information€providerÌto€maintain€a€certain€level€of€call€completion,€if€youÌwill,€or€call€--€and€so€that€the€800€number€that€theyÌare€offering€is€accessible,€and€my€understanding€is€thatÌthat's€possible€for€this€industry€to€do,€so€that€if€youÌneed€more€capacity€with€this€800€number,€you€can€add€it,Ìand€then€people€can€get€through€and€we€can€identify,€andÌit€seems€to€me€that€would€help€minimize€chargebacks.Ì€€€€€€€€MS.€HARRINGTON:€€All€right,€let's€do€a€check€onÌthat.€€IPs€and€IP€types,€if€the€--€if€there€were€greaterÌclarity€with€regard€to€the€60-day€requirement€forÌplacing€charge€--€for€raising€disputes,€would€--€inÌexchange€for€that,€would€IPs€be€willing€to€agree€to€aÌcertain€standard€of€call€completion€or€level€of€callÌcompletion€on€your€billing€inquiry€numbers?Ì€€€€€€€€Peter?Ì€€€€€€€€MR.€BRENNAN:€€Absolutely.€€In€fact,€it's€been€myÌimpression€that€that's€required€now.Ì€€€€€€€€MS.€HARRINGTON:€€Okay.Ì€€€€€€€€MR.€BRENNAN:€€Doesn't€the€law€--€I'm€not€sure€ifÌit's€a€law€or€the€rule€--€require€that€there€be€aÌÐ	   	 ì,'2   Ðtoll-free€way€of€--€and€it's€required?€€Whether€or€notÌ--€whether€or€not€that's€being€lived€up€to,€just€as€theÌLECs€aren't€living€up€to€the€60-day€part€of€the€rule€--Ì€€€€€€€€MR.€GILLIS:€€Maybe€--Ì€€€€€€€€MR.€BRENNAN:€€--€that's€another€issue.Ì€€€€€€€€MR.€GILLIS:€€Maybe€call€completion€is€the€wrongÌterm.€€Some€people€complete€the€call€and€then€they€areÌput€on€hold€for€40€minutes.€€So,€a€response€time.Ì€€€€€€€€MS.€HARRINGTON:€€Some€sort€of€standard€forÌresponse.Ì€€€€€€€€MR.€BRENNAN:€€In€good€faith,€right,€right.€€IÌmean,€in€our€case,€we€have€a€24-hour€operation.€€For€allÌbut€four€hours€a€day,€there€are€live€operators€there,Ìbecause€they€are€also€taking€personal€ads,€doing€theÌother€things€that€they€do,€and€we€manage€--€we€manage€itÌto€the€point€where€if€it's€more€than€11€seconds€thatÌsomebody€rings€on€the€phone,€okay,€which€is€two€and€aÌhalf€rings,€you€know,€we€hire€more€people.€€So,€youÌknow€--Ì€€€€€€€€MS.€HARRINGTON:€€Okay,€there€is€one€answer.€€WeÌwant€quick€answers€here.Ì€€€€€€€€Gary?Ì€€€€€€€€MR.€PASSON:€€Well,€we€man€a€24€hour€a€dayÌfacility,€but€I€would€have€--€we€have€to€differentiateÌjust€a€little€bit€here.€€An€awful€lot€of€inquiry€that'sÌÐ	   	 ì,'2   Ðdone€is€done€by€the€third-party€aggregators€or€by€AT&TÌor€MCI€or€Sprint€or€behalf€of€them,€so€that€only€a€smallÌpercentage€of€the€actual€calls€end€up€in€the€hands€ofÌthe€major€service€bureaus€or€even€in€a€--€even€in€a€rareÌcase€end€up€in€the€hands€of€the€IPs.€€We€representÌthousands€of€--Ì€€€€€€€€MS.€HARRINGTON:€€But€what€we€are€hearing€isÌconsumers€who€try€to€call€IPs€aren't€able€to€getÌthrough.Ì€€€€€€€€MR.€PASSON:€€Right,€and€I€think€--€and€I€guessÌthe€reason€is€if€they€are€calling€for€a€billing€dispute,Ìthen€I€think€we€have€a€little€separate€issue€than€ifÌthey€are€calling€for€information€about,€you€know,Ìsustaining€information€about€what€was€really€going€on€onÌthe€specific€call.€€So,€I€think€we€have€to€try€toÌdifferentiate€here€between€the€two€cases,€but€to€get€toÌyour€specific€question,€the€answer€is€I€thinkÌabsolutely,€I€think€all€the€major€companies€would€enjoyÌthat.Ì€€€€€€€€MS.€HARRINGTON:€€All€right,€Albe?Ì€€€€€€€€MR.€ANGEL:€€Our€company's€policy€is€absolutelyÌto€deal€with€consumer€inquiries€promptly,€which€isÌtypically€defined€as€one€business€day.€€The€billing€isÌ--€billing€inquiries€are€typically€performed€by€eitherÌthe€LEC€or€the€interexchange€carrier,€in€instances€theyÌÐ	   	 ì,'2   Ðwill€bump€that€call€to€us,€and€even€in€instances€whereÌrefunds€have€already€been€made,€we€will€bend€overÌbackwards€to€make€a€second€refund€if€a€consumer€feelsÌthat€somehow€they€have€not€gotten€the€proper€answer,€notÌgotten€the€cash.Ì€€€€€€€€MS.€HARRINGTON:€€Dave?Ì€€€€€€€€MR.€GILLIS:€€Well,€I€--€it's€--€this€is€all€goodÌto€hear.€€The€problem€is€we€continue€to€get€complaintsÌfrom€people€that€I'm€trying€to€get€through€withÌquestions€about€their€bills€to€specific€informationÌproviders€who€have€been€put€along€the€way€from€the€localÌphone€company€to€the€interexchange€carrier€to€either€theÌbill€aggregator€or€the€--€and€they€can't€get€through.ÌThey€are€put€on€hold,€and€they€--Ì€€€€€€€€MS.€SCHWANKE:€€Can€I€ask€a€question,€David?€€DoÌyou€think€it's€the€--€are€they€claiming€they€can't€getÌthrough€to€the€information€provider€or€is€it€the€billingÌentity€or€the€organization€that€has€agreed€to€deal€withÌbilling€questions?€€I€mean,€might€it€be€the€billingÌentity€or€the€billing€aggregator€and€not€the€informationÌprovider€they€are€having€difficulty€getting€in€touchÌwith?Ì€€€€€€€€MR.€GILLIS:€€It€may€--€it€would€be€the€entityÌthat€is€able€to€resolve€their€questions€about€theirÌbill,€including€the€authority€to€drop€the€charges€ifÌÐ	   	 ì,'2   Ðthat's€appropriate.Ì€€€€€€€€MS.€HARRINGTON:€€Okay,€questions€from€Adam,ÌMark,€and€then€we€are€going€to€Joel.Ì€€€€€€€€MR.€DICHTER:€€I€can€talk€to€this,€too.Ì€€€€€€€€MS.€HARRINGTON:€€Okay,€Joel,€talk€about€this,Ìand€then€we€will€go€to€Adam€and€Mark.Ì€€€€€€€€MR.€DICHTER:€€I€think€we€are€probably€talkingÌabout€the€bill€aggregators,€because€when€you€get€aÌseparate€billing€page,€there€is€a€separate€800€numberÌfor€the€company€that's€rendering€the€bill,€and€you€callÌthat,€that€would€be€the€first€point€of€contact€or€theÌlocal€phone€company€for€that€consumer€to€try€and€redressÌtheir€dispute.Ì€€€€€€€€I€know€from€the€IP€perspective€that€they€try€asÌbest€they€can€to€have€all€these€companies€have€as€manyÌpeople€on€hand€to€answer€those€questions€as€quickly€asÌpossible,€and€I€think€there€have€been€improvements.€€I'mÌnot€saying€it's€perfect,€but€I€think€there€have€been€aÌlot€of€improvements,€because€everyone€realizes€no€one€inÌthe€industry€gains€if€a€consumer€is€dissatisfied,€can'tÌget€an€answer€to€his€questions,€starts€writing€toÌattorney€generals.€€That's€not€in€anyone's€interests.Ì€€€€€€€€So,€I€think€there€--€there€is€in€that€regard€anÌeffort€to€try€and€be€more€responsive€to€that€and€to€putÌmore€investment€into€having€operators€who€can€answer€theÌÐ	   	 ì,'2   Ðquestions€and€setting€up€terminals€and€having€the€dataÌonline€if€they€can€do€it.€€Part€of€that€process€to€helpÌwith€that€has€been€the€voice€capture€mechanisms,Ìsomething€used€by€operator-assisted€companies,€etÌcetera,€because€it's€--€and€I€have€been€a€party€to€thisÌin€some€places€where€we€have€been€asked€to€get€involvedÌwhen€an€attorney€general€steps€in€and€a€consumerÌdisputes€a€claim,€and€I€have€been€on€calls€with€theÌlocal€phone€company€and€the€consumer€when€they€go€intoÌthis€data€base€and€hear€the€voice€capture,€yes,€IÌordered€the€voicemail€service€or€whatever€it€is,€yes,Ìand€that€really€helps€a€lot.€€It€doesn't€answer€all€theÌquestions.€€There€are€still€going€to€be€people€who€say€IÌdon't€recognize€the€voice,€but€it€really€has€helped€in€aÌgood,€significant€number€of€cases€where€it's€beenÌbeneficial.Ì€€€€€€€€Also,€on€your€question€I€think€early€on€startingÌthis€session€this€afternoon,€we€have€tried€to€be€alsoÌhelpful€in€getting€additional€information.€€The€initialÌletter€response€to€the€person€who's€complaining€to€theÌattorney€general€may€say€we€generally€do€this.€€If€theÌquestion€asks€for€additional€information,€I€go€to€myÌclients,€and€they€answer€us€when€they€can,€they€haveÌbeen€responsive;€and€in€going€to€the€interstate€--Ìinterexchange€carrier€and€asking€them€for€information€onÌÐ	   	 ì,'2   Ðtheir€call€records€to€back€up€what€their€own€records€areÌand€to€try€and€show€that€yes,€this€call€was€indeed€made,Ìthat€there€was€no€phantom€call.Ì€€€€€€€€And,€you€know,€there€may€--€there€probably€areÌphantom€billings,€and€I€don't€think€it's€a€hugeÌproblem.€€I€can€say€from€ITA's€perspective,€and€I€amÌhere€to€talk€on€an€ITA€perspective,€on€an€internationalÌfront,€it€is€all€handled€by€the€long€distance€carrier.ÌSo,€you€can't€even€have€a€phantom€call€from€thatÌperspective,€except€for€the€clip-on€fraud.Ì€€€€€€€€MS.€HARRINGTON:€€Adam?Ì€€€€€€€€MR.€COHN:€€I€have€a€question.€€This€relates€backÌto€some€points€made€earlier€regarding€calls€which€areÌidentified€on€a€bill€in€a€different€way€from€what€theÌcustomer€actually€dialed.€€It€--€my€question€is,€doesÌthis€make€it€more€difficult€for€a€consumer€to€realizeÌwhy€they€have€a€bill?€€I€mean,€isn't€that€really€theÌfront€line€on€stopping€this€whole€problem€of€consumersÌcomplaining€about€they€didn't€make€calls?Ì€€€€€€€€And€related€to€that€is,€I€am€curious€as€to€whyÌthat's€happening.€€Why€are€there€people€who€are€billingÌ800€number€calls€as€pay-per-call€still,€and€it's€myÌunderstanding€that€that's€what€900€number€is€for.€€IÌknow€there€are€a€lot€of€issues€relating€to€internationalÌaudiotext,€and€that€might€have€advantages€over€900€forÌÐ	   	 ì,'2   Ðcertain€reasons,€but€why€would€someone€want€to€bill€toÌan€800€as€a€pay-per-call€as€opposed€to€just€straight€toÌa€900€call€and€how€is€this€happening?€€And€I'll€stopÌthere.Ì€€€€€€€€MS.€WILLIAMS:€€I€think€everybody€went€to€900Ìwhen€the€--€I€mean€to€800€when€the€900€rules€first€cameÌout,€because€it€was€--€there€weren't€the€sameÌprotections€and€because€people€jumped€into€thatÌpresubscription€loop€hole€and€said,€Oh,€good,€we€giveÌthem€everything€here,€and€we€don't€have€a€problem.Ì€€€€€€€€MR.€COHN:€€But€my€question€is€why€is€that€billedÌas€a€pay-per-call?€€I€mean,€shouldn't€--€if€someone€isÌnot€availing€themselves€of€the€900€billing€system,€whyÌwould€they€want€an€800€call€to€be€billed€as€a€900?€€WhyÌnot€just€have€someone€call€a€900€number?€€And€if€theyÌuse€a€presubscription€agreement€under€800,€shouldn'tÌthere€be€some€other€billing€mechanisms?€€Why€would€theyÌbe€going€through€the€LEC€at€all?€€I€don't€understandÌthat.Ì€€€€€€€€MS.€WILLIAMS:€€To€bill€an€800?€€I€would€say€toÌget€it€collected.€€I€would€--€I'm€not€sure€if€IÌunderstand€what€your€question€is.€€I€think€that,€youÌknow,€the€same€companies€who€were€billing€900€moved€toÌ800€and€tried€to€bill€800,€whether,€you€know,€originallyÌwe€didn't€even€know€what€was€being€billed.€€We€got€callsÌÐ	   	 ì,'2   Ðto€Florida,€calls€to€--€all€over€the€place,€and€none€ofÌthem€looked€like€800,€because€people€were€for€mattingÌthe€calls€in€a€way€that€our€billing€system€would€acceptÌit.€€We€didn't€accept€800€calls,€and€nobody€came€to€usÌand€asked€us€--€to€ask€if€we€would€bill€them.€€They€justÌsent€them€in€another€way.Ì€€€€€€€€I€mean,€I€think€the€rule€left€it€open€for€800Ìpay-per-call,€if€you€want€to€call€it€that.€€I€don'tÌthink€as€many€people€use€it€today.€€I€think€they€haveÌmoved€to€international€now€or€monthly€fees,€but€itÌcertainly€was€a€problem€for€quite€a€while.Ì€€€€€€€€MS.€HARRINGTON:€€Yes,€it€was.€€We€did€someÌenforcement€in€that€area.Ì€€€€€€€€Marianne?Ì€€€€€€€€MS.€SCHWANKE:€€My€question€goes€back€to€theÌquestion€of€what's€a€reasonable€investigation,€and€IÌwondered€what€you€think€about€whether€the€rule€shouldÌstandardize€the€investigation€procedure€by€eitherÌsetting€forth€specific€requirements€for€conducting€anÌinvestigation€of€an€alleged€billing€error€or€maybeÌperhaps€by€setting€a€safe€harbor€or€some€kind€of€minimumÌstandards.Ì€€€€€€€€MS.€WILLIAMS:€€If€I€--Ì€€€€€€€€MS.€HARRINGTON:€€Let's€go€to€Albe,€who€has€hadÌhis€card€up.ÌÐ	   	 ì,'2   Ð€€€€€€€€MR.€ANGEL:€€This€is€actually€responsive€toÌMarianne's€question,€the€point€that€I€wanted€to€make.ÌFirst,€I€wanted€to€clarify€what€appears€to€be€a€typo€onÌthe€agenda.€€Under€the€segment€that€is€1:30€to€3:15,€theÌthird€bullet€point€that€appears€toward€the€bottom€of€theÌpage,€it€says,€"Are€IPs€--"Ì€€€€€€€€MS.€HARRINGTON:€€No,€we€meant€billing€entities.Ì€€€€€€€€MR.€ANGEL:€€Right,€this€would€be€LECs,€not€IPs.Ì€€€€€€€€MS.€HARRINGTON:€€Or€billing€entities,€notÌnecessarily€LECs.Ì€€€€€€€€MR.€ANGEL:€€Right,€that€are€required€to€have€aÌ"reasonable€investigation."Ì€€€€€€€€MS.€HARRINGTON:€€Right.Ì€€€€€€€€MR.€ANGEL:€€The€ISA€convened€an€ad€hoc€groupÌwhich€called€itself€the€billing€task€force,€and€this€wasÌcomprised€of€billing€entities€that€were€LECs,Ìthird-party€billers,€IPs€and€service€bureaus,€and€it€wasÌa€multi-month€process€where€we€compared€notes,€winnowedÌit€down,€and€one€of€the€primary€findings€of€that€taskÌforce,€which€is€contained€in€Exhibit€B€to€ISA'sÌcomments,€was€that€consistent€and€timely€LEC€write-offÌprocesses€are€important€so€that€service€bureaus€and€IPsÌcan€quickly€identify€and€block€users.€€The€investigationÌthat€we€have€in€mind€is€not€a€lengthy€investigation.€€ItÌis€an€investigation€similar€to€the€one€that€Jon€ShaubÌÐ	   	 ì,'2   Ðidentified.€€On€the€same€call€that€the€consumer€comes€toÌthe,€you€know,€the€billing€entity€to€complain,€there€isÌsome€resolution,€and€it's€resolved.Ì€€€€€€€€MS.€SCHWANKE:€€But€what€do€you€think€aboutÌstandardizing€the€procedures€for€determining€whether€orÌnot€the€charges€should€be€sustained?Ì€€€€€€€€MR.€ANGEL:€€Okay,€we€would€love€to€do€that.€€AÌconsistent€theme€throughout€the€ISA€comments€is€thatÌgreater€uniformity€in€the€area€of€billing€works€toÌeveryone's€advantage,€so€that€there€is€less€squabblingÌabout€what€should€be€done.Ì€€€€€€€€Now,€the€difficulty€that€we€have€is€that€if€youÌunderstand€the€telecommunications€industry€and€howÌpeople€are€stratified€and€where€it€is€that€they€getÌtheir€marching€orders€from,€it€is€not€simply€the€caseÌthat€an€information€provider€can€complain€to€a€carrierÌand€hold€out€on€this€point€for€purposes€of€getting€theirÌbilling€and€collections€contracted€precisely€the€wayÌthey€want€it.Ì€€€€€€€€There€are€other€issues€in€the€LECs,€andÌtypically€an€interexchange€carrier€will€have€to€referÌback€to€his€support€people,€his€or€her€support€people,Ìto€determine€whether€or€not€they€can€implement€theÌspecific€procedure€that's€being€asked€for.€€InvariablyÌthose€roads€lead€back€to€either€contracts€with€the€localÌÐ	   	 ì,'2   Ðexchange€carriers€or€some€process€that's€either€ongoingÌor€hasn't€yet€been€initiated€at€the€ordering€and€billingÌforum.Ì€€€€€€€€And€then€creating€a€priority€position€within€theÌordering€and€billing€forum€is€a€near€impossibility€forÌthe€years€that€I've€had,€you€know,€I've€been€followingÌthis€issue.€€So,€to€summarize,€we€don't€really€have€anyÌbargaining€power€when€it€comes€to€using€theÌinterexchange€carrier€to€discipline€the€LECs€on€issuesÌof€timeliness€in€terms€of€billing€investigation.Ì€€€€€€€€And€we€would€really€like€to€use€this€regulatoryÌproceeding€and€administrative€proceeding€to€focus€on€theÌissue€and€say,€you€know,€it's€high€time€that€we€doÌsomething€by€administrative€rule€to€rectify€the€problemÌand€that€the€solution€is€quick€and€timely€reporting€andÌquick€and€timely€resolution€of€the€consumer's€complaint,Ìand€that€typically€means€on€the€same€call.Ì€€€€€€€€MS.€HARRINGTON:€€Mark?Ì€€€€€€€€MR.€HERTZENDORF:€€Well,€I€think€my€questionÌmaybe€was€just€answered,€so€I'll€ask€the€next€questionÌthat€I€came€up€with€while€I€was€listening€to€that€one.Ì€€€€€€€€If€there€is€such€a€problem€going€through€theÌLECs€in€terms€of€you're€not€happy€with€them€forwardingÌthe€information€about€the€customers€who€aren't€payingÌup,€and€I€guess€this€is€a€problem€even€if€AT&T€or€someÌÐ	   	 ì,'2   Ðthird€party€is€doing€the€billing€and€inquiry,€becauseÌyou€just€don't€know€about€these€people€until€monthsÌlater,€I€guess€the€problem€is€not€so€great€that€you€wantÌto€send€them€a€separate€bill€and€have€a€third€partyÌactually€put€a€separate€bill€in€the€mail,€and€you€couldÌhandle€the€whole€process€from€beginning€to€end?Ì€€€€€€€€MS.€HARRINGTON:€€An€answer€to€Mark's€question?Ì€€€€€€€€Peter?Ì€€€€€€€€MR.€BRENNAN:€€Yes,€the€cost€of€doing€that€forÌlow€and€medium-priced€services€would€be€prohibitive,€andÌthe€result€would€be€anti-consumer.€€All€I€think€we€canÌexpect,€and€I€address€this€as€much€to€my€colleague€andÌvendor€and€to€the€Commission,€all€we€would€expect€in€aÌsituation€---€and€we€would€just€as€soon€handle€our€ownÌcomplaints€and€do€our€own€investigation,€because€we€findÌin€most€cases€it's€a€good€faith€issue€and€able€to€beÌclarified€--€is€the€information€in€a€timely€way€to€doÌthat,€and€that€means€the€information€about€the€call,€theÌinformation€about€the€customers€and€any€otherÌinformation€that€is€a€part€of€that€process.Ì€€€€€€€€MR.€HERTZENDORF:€€What's€the€reason€why€the€--Ìis€there€some€legal€impediment€for€the€LECs€to€say€whoÌhasn't€paid€their€bill€within€30€days,€even€if€youÌhaven't€--€even€if€it's€still€under€treatment?Ì€€€€€€€€MS.€WILLIAMS:€€Well,€when€we€bill,€I€wanted€toÌÐ	   	 ì,'2   Ðaddress€the€billing€inquiry€issue.€€When€we€billÌcharges,€we€are€collecting€on€a€total€balance€due.€€So,Ìif€a€customer€is€making€a€partial€payment€or€somethingÌlike€that,€we€don't€know€what€he's€withholding€paymentÌon€unless€he€contacts€us€to€tell€us€that.Ì€€€€€€€€When€it€comes€to€the€billing€inquiry€issue,€whenÌcustomers€call€us,€we€don't€do€inquiry€for€most€of€theÌcompanies€we€bill€for.€€We€do€it€for€very€little.€€So,Ìmost€of€the€time€the€customer€calls€us€about€theseÌcharges,€and€as€you€heard€from€some€of€the€complaints,Ìwe€do€refer€them€back€to€the€company€who€has€the€billingÌcontract€with€us.Ì€€€€€€€€And€many€of€the€complaints€we€get€back€fromÌcustomers€are€that€they€have€gone€to€them,€they€haveÌasked€for€an€adjustment,€either€it€was€promised€andÌnever€given€or€it€would€take€60€to€90€days€to€give€it,Ìor€they€didn't€get€an€adjustment,€and€they€felt€likeÌthey€should.€€So,€we€get€customers€back€all€the€time.ÌSometimes€it's€after€months€of€waiting€for€an€adjustmentÌthat€never€came.Ì€€€€€€€€Then€we€issue€to€the€adjustment,€and€now€we€areÌback€to€that€60-day€thing€that€we€are€way€past€again,Ìbut€that€customer€asked€for€one€long€ago,€and€I€thinkÌsome€of€the€hold-up€in€some€of€that€is€not€necessarilyÌthe€LEC€hold-up.€€It€is€the€person€or€I€mean€the€companyÌÐ	   	 ì,'2   Ðwho€has€the€billing€contract€with€us.Ì€€€€€€€€We,€if€a€customer€does€come€to€me€and€I€take€itÌoff€the€bill,€there€is€no€waiting€period.€€I€take€it€offÌthe€bill€in€that€call,€I€am€on€the€call€for€a€fewÌminutes,€try€to€sustain€it,€go€through€dates€and€timesÌof€call,€was€there€anybody€in€the€household,€look€at€theÌprior€month's€bill,€has€this€customer€made€these€kindsÌof€calls€before.Ì€€€€€€€€If€he€has,€I€offer€him€900€blocking,€make€anÌadjustment,€post€the€account€the€next€day,€and€it€goesÌback€to€the€billing€company.€€If€the€carrier€or€companyÌwho€has€the€billing€contract€gets€their€adjustments€fromÌme€on€a€daily€basis,€which€they€can€do,€they€will€knowÌthe€next€day.€€If€they€only€get€it€once€a€month,€theyÌwon't€know€until€a€month€later,€or€if€they€just€missed€aÌbilling€report,€then€it€will€be€two€months€later.Ì€€€€€€€€So,€some€of€that€hold-up€in€reporting€isn'tÌreally€from€the€LEC.€€When€I€go€back€to€that€treatmentÌissue,€when€I'm€trying€to€collect€from€customers,€it€mayÌtake€three€months€--€that's€about€the€standard€time€forÌus,€about€90€days€after€a€charge€is€billed,€minimum,Ìbefore€an€account€write€off€because€of€that€wholeÌcollection€and€treatment€process€that€we're€regulatedÌunder.Ì€€€€€€€€Once€that€customer€writes€off,€those€nondeniableÌÐ	   	 ì,'2   Ðcharges€are€sent€back€to€the€billing€company,€and€nowÌthey€are€at€least€90€days€old,€if€not€older,€becauseÌthat€customer€didn't€pay€his€phone€bill,€period,€and€hisÌcharges€were€written€off€and€sent€back.€€So,€timelyÌnotification,€we€are€working€under€the€constraints€ofÌthe€regulatory€system,€and€sometimes€I€think€the€billingÌclearinghouse€is€the€one€causing€the€hold-up,€not€theÌLEC.Ì€€€€€€€€MS.€HARRINGTON:€€Don?Ì€€€€€€€€MR.€KLUG:€€I€think€we€need€to€kind€of€--€if€weÌare€looking€at€billing€disputes€to€kind€of€keep€a€coupleÌof€things€in€perspective.€€Dave€and€Susan€were€talkingÌabout€consumer€complaints,€about€not€being€able€to€getÌthrough€and€find€out€who€the€IP€is.€€In€our€MCIÌperspective,€it€is€less€than€30€percent,€so€of€all€theÌcalls€to€the€network,€less€than€one€of€those€isÌinquiries€about€the€call.€€So,€that€is€fairly€low€forÌthe€industry.Ì€€€€€€€€MS.€HARRINGTON:€€Well,€but€I€think€the€questionÌis€what€happens€with€that€--€you€know,€what's€theÌexperience€of€the€consumers€who€constitute€that€1Ìpercent?Ì€€€€€€€€MR.€KLUG:€€Okay,€I€just€wanted€to€have€that€asÌthe€data€point.Ì€€€€€€€€MS.€HARRINGTON:€€I€understand.ÌÐ	   	 ì,'2   Ð€€€€€€€€MR.€KLUG:€€Have€it€out€there,€and€the€otherÌpoint€is€Representative€Gordon€this€morning€talked€aboutÌa€double-edged€sword.€€There€is€a€requirement€for€theÌIPs€to€provide€information€about€the€programs,€but€thereÌis€no€requirement€for€the€billing€entities€to€provideÌthe€information€provider€of€the€notice€that€someone€hasÌrequested€an€adjustment.Ì€€€€€€€€MS.€HARRINGTON:€€Mark,€you€can't€do€a€side€bar.ÌYou€need€to€get€called€on€and€use€your€microphone.Ì€€€€€€€€MR.€HERTZENDORF:€€I€guess€I'm€confused€aboutÌsomething€you€said.€€There€was€a€1€percent€inquiry€rate,Ìbut€earlier€we€talked€about€a€20€percent€chargebackÌrate.€€So,€I'm€confused.Ì€€€€€€€€MR.€KLUG:€€Well,€the€chargebacks€are€a€percentÌof€revenue€and€the€1€per€is€a€percent€of€calls.€€So,Ìit's€two€different€things.Ì€€€€€€€€MR.€HERTZENDORF:€€Oh,€oh.Ì€€€€€€€€MS.€HARRINGTON:€€Marianne,€do€you€have€aÌquestion?€€Okay,€let's€go€to€Alan€and€then€Jon€and€thenÌGary.€€Oh,€Gary's€sign€is€down.Ì€€€€€€€€MR.€TAYLOR:€€Thank€you,€Madam€Chairman,€I€willÌbe€brief,€because€I€know€your€coffee€time€has€passed.Ì€€€€€€€€MS.€HARRINGTON:€€Actually,€it€is€coming€up€inÌsix€minutes,€and€we're€hoping€that€it's€done.ÌExcellent.ÌÐ	   	 ì,'2   Ð€€€€€€€€MR.€TAYLOR:€€Actually,€I€just€wanted€to€sort€ofÌbuild€on€a€question€Adam€asked,€and€that€was€why€wouldÌanyone€use€the€service€access€code€other€than€900.€€InÌour€comments,€we€provided€an€example€of€a€phone€bill€--Ìoh,€I€don't€know€that€it's€--€the€little€old€lady€layingÌin€the€nursing€home€who€was€billed€$1,000€--€well,€$600Ìor€$700€for€conference€calling€when€she€was€physicallyÌunable€to€even€be€on€the€phone€that€long€and€only€has€aÌphone€to€receive€calls€from€her€son€who€lives€somewhereÌelse.Ì€€€€€€€€How€would€--€when€we're€talking€about€authorizedÌcalls,€how€would€that€person€go€about€blocking€access€toÌthe€700€number€if€the€information€provider€is€going€toÌcontinue€to€use€the€700?€€Now,€I€know€the€informationÌprovider€will€say,€Well,€just€call€us,€and€we€will€putÌthat€number.€€Okay,€that€takes€care€of€one,€but€how€manyÌhundred€calls€would€that€person€have€to€make€to€reachÌall€information€providers€to€say€I€don't€want€anyone€toÌbe€able€to€dial€a€700€$49.50€a€minute€call€from€myÌphone?Ì€€€€€€€€Can€the€industry€answer€that?€€I'm€just€bringingÌthe€focus€back€to€what€we're€supposed€to€be€talkingÌabout€at€this€period,€unauthorized€calls€as€opposed€toÌindustry€issues€with€the€LECs.Ì€€€€€€€€MS.€HARRINGTON:€€Ah,€do€Barbara€or€Walt,€do€youÌÐ	   	 ì,'2   Ðhave€an€answer,€or€Jon,€to€that€question?Ì€€€€€€€€Do€you€have€an€answer,€Gary?Ì€€€€€€€€MR.€PASSON:€€It's€a€little€circular€here,€butÌone€of€the€things€we€talked€about€earlier€was€whatÌinformation€would€be€made€available€to€informationÌproviders,€and€so€I€think€maybe€one€answer€to€thisÌquestion€would€be€that€if€information€services€was€aÌpiece€of€information€that€was€made€available,€say,€on€aÌLIDB€data€base€that€can€be€checked€at€any€time€by€aÌservice€provider,€independent€of€its€dialing€platform,Ìthen,€you€know,€then€they€could€make€a€business€decisionÌthat€obviously€this€specific€telephone€has€said€I€don'tÌwant€to€take€information€services,€so€therefore,€theyÌwould€not€allow€that€transaction€to€occur.Ì€€€€€€€€That's€one€way€it€could€happen,€and€I€think€thatÌdrives€us€back€to,€you€know,€what's€--€you€know,€rightÌnow€we€have€the€900€blocking€data€base.€€Maybe€thatÌshouldn't€be€made€available€on€LIDB€but€maybe€some€otherÌpiece€of€information€that€says€I€don't€want€--Ìinformation€services€outside€of€the€900€world€should€beÌmade€available€on€LIDB.Ì€€€€€€€€MR.€STEIMEL:€€A€complaint€that€involves€Pilgrim,ÌI€actually€pulled€down€the€electronic€call€records€onÌthat€complaint,€and€it's€a€fairly€typical€fraudÌpattern.€€Apparently€somebody€who€works€for€the€nursingÌÐ	   	 ì,'2   Ðhome€obtained€access€to€that€line€and€got€a€callingÌcard.€€The€calls€were€never€made€at€the€nursing€home.ÌWe€know€who€perpetuated€the€fraud,€because€we€have€theirÌhome€phone€number€and€voice€print.€€So,€full€credit€wasÌimmediately€issued€on€the€account€and€then€we€were€ableÌto€track€it€back€to€the€person€who€was€fraudulentlyÌstealing€service€and€charging€it€to€the€poor€lady€in€theÌnursing€home.Ì€€€€€€€€In€a€situation€like€that,€normally€what€aÌcarrier€can€do€is€they€can€block€a€number€to€prevent€aÌcalling€card€from€ever€being€issued€to€that€number.€€InÌthis€particular€situation,€that€nursing€home€also,€weÌdid€a€LIDB€screen,€and€they€had€no€LIDB€blocks€forÌcalling€card€or€third-number€--€third-number€--€I€meanÌcollect€or€third-number€billing.€€So,€people€could€haveÌaccepted€collect€calls€to€her€phone€and€issued€--€andÌsent€third-number€call€bills€to€her€line€and€there€wasÌno€way€to€check€that.Ì€€€€€€€€There€also€appears€to€be€no€information€digitsÌon€that€to€identify€if€the€calls€were€coming€out€of€theÌnursing€home€facility€and€the€calls€were€not€clearedÌback€through€a€--€were€not€cleared€out€through€a€PBX.ÌSo,€someone€--Ì€€€€€€€€MR.€TAYLOR:€€Was€it€an€unauthorized€call€then€orÌnot?€€You€said€if€it€comes€from€that€number,€I€have€aÌÐ	   	 ì,'2   Ðright€to€collect€it€under€the€law.Ì€€€€€€€€MR.€STEIMEL:€€This€was€a€calling€card€call.Ì€€€€€€€€MS.€WILLIAMS:€€Was€it€a€card€issued€by€Pilgrim?Ì€€€€€€€€MR.€STEIMEL:€€It€was€a€Pilgrim-issued€callingÌcard.Ì€€€€€€€€MS.€HARRINGTON:€€Adam€has€a€question€here.Ì€€€€€€€€MR.€COHN:€€I€have€a€question€about€the€callingÌcard.€€So,€this€person€received€a€bill€that€said€thatÌcalls€were€made€from€that€phone€in€the€nursing€home€butÌin€reality€there€were€no€calls€placed€from€that€phone€inÌthe€nursing€home?Ì€€€€€€€€MR.€STEIMEL:€€No,€no€--Ì€€€€€€€€MR.€COHN:€€That's€my€understanding€of€a€phantomÌcall.Ì€€€€€€€€MR.€STEIMEL:€€This€one€says€teleconference.ÌThis€may€be€a€situation€where€--€I€would€have€to€goÌcheck€again€--€this€may€be€a€situation€where€the€LECÌdoes€not€permit€the€detail€that€we€would€need€toÌindicate€that€it's€a€calling€card€call,€although€we€wentÌback€and€checked€that€it€was€a€calling€card€call.ÌElectronically,€we€cannot€transmit€the€information€toÌthem€to€cause€the€bill€to€print€that€way,€and€--€theyÌcalled€the€800€number€on€the€bottom€of€the€phone€--€onÌthe€bottom€of€the€phone€bill,€and€we€were€able€to€tellÌthem€it€was€a€calling€card€call.€€That's€what€it€looksÌÐ	   	 ì,'2   Ðlike€to€me€from€looking€at€the€bill€and€then€looking€atÌthe€detail€that€we€printed€off€of€the€switch€related€toÌthat€particular€call.Ì€€€€€€€€Typically€these€would€show€--€would€show€that€itÌwas€a€calling€card€call.€€It€could€be€that€thisÌparticular€LEC€does€not€permit€the€pay-per-callÌdisclaimer,€the€TDDRA€disclaimer€that€we€have€to€have€onÌthe€bill€except€through€certain€electronic€formats,€andÌso€the€only€choice€the€carrier€has€is€to€submit€itÌthrough€electronic€format€to€drive€the€disclaimer€on€theÌbill,€which€a€lot€of€carriers€think€is€the€mostÌimportant€aspect,€and€then€there€is€an€800€number€I€canÌdial€for€the€carrier€to€find€out€exactly€what€happened.Ì€€€€€€€€MR.€COHN:€€Actually,€I'm€a€little€confused.€€YouÌsaid€earlier€that€it€was€a€calling€card,€but€you're€notÌsure?Ì€€€€€€€€MR.€STEIMEL:€€It€is€a€calling€card€call,€yeah.Ì€€€€€€€€MR.€COHN:€€But€those€calls€were€--€were€anyÌcalls€placed€from€that€phone?Ì€€€€€€€€MR.€STEIMEL:€€It€does€not€appear€to€me€that€theÌcalls€were€placed€from€that€number,€that€the€originalÌcall€when€they€got€the€calling€card,€that€was€placedÌfrom€--€the€calling€card€was€subscribed€to€from€theÌnumber€that€was€billed,€but€then€the€calls€that€wereÌactually€--€in€which€a€billing€event€took€place€wereÌÐ	   	 ì,'2   Ðmade€from€a€different€location€and€then€billed€to€theÌcalling€card.Ì€€€€€€€€MR.€COHN:€€Okay,€billed€on€the€calling€card,€butÌon€the€bill€it€appeared€to€be€a€call€from€that€phoneÌnumber.Ì€€€€€€€€MR.€STEIMEL:€€Actually,€it€just€says€numberÌcalled.Ì€€€€€€€€MS.€WILLIAMS:€€Appears€as€a€direct€dial€call.Ì€€€€€€€€MR.€STEIMEL:€€It€says€teleconference€700.Ì€€€€€€€€MR.€COHN:€€My€follow€up€to€that€--Ì€€€€€€€€MS.€HARRINGTON:€€Says€what?Ì€€€€€€€€MR.€STEIMEL:€€Teleconference€and€a€number.Ì€€€€€€€€MS.€HARRINGTON:€€Okay.Ì€€€€€€€€MR.€COHN:€€My€follow€up€to€that€is€if€you€haveÌsuch€a€hard€time€determining€just€from€the€informationÌthat€you€have€how€the€call€was€generated€and€where€theÌcalls€came€from,€how€could€a€consumer€who€received€aÌbill€with€all€those€calls€on€it€who€had€a€locked€houseÌfor€the€week€that€they€were€--€received€all€these€bills,Ìwho€did€everything€they€could€to€keep€their€phone€fromÌbeing€used,€and€then€they€received€a€bill€that€indicatedÌthat€their€phone€had€been€used,€and€they€send€a€letterÌin€that€says€I€didn't€make€these€calls,€and€they€get€aÌresponse€back€that€says€that€our€records€indicate€thatÌthese€were€calls€made€from€your€phone,€why€isn't€that€aÌÐ	   	 ì,'2   Ðphantom€bill?€€I€just€don't€--Ì€€€€€€€€MR.€STEIMEL:€€When€a€customer€calls€the€carrierÌand€complains€about€the€call,€the€carrier€shouldÌimmediately€look€up€the€call€records€and€see€whatÌhappened€and€tell€the€customer€what€happened.Ì€€€€€€€€MS.€HARRINGTON:€€Kim,€do€you€agree€with€that?Ì€€€€€€€€MS.€WILLIAMS:€€No,€that€call€record,€I'm€seeingÌit's€shown€as€a€direct€dial€call€with€a€700€number€andÌit€was€a€teleconference.€€If€that's€not€what€was€reallyÌdialed€and€it€was€a€calling€card€call,€it€should€show€upÌas€a€calling€card€call.€€I€think€this€is€an€example€of€aÌcall€record€that€is€made€up,€not€what€really€occurred.Ì€€€€€€€€MS.€HARRINGTON:€€We€have€a€difference€in€theÌfactual€circumstances€on€the€record€here.Ì€€€€€€€€MR.€STEIMEL:€€We€are€historically€not€inÌagreement.Ì€€€€€€€€MS.€HARRINGTON:€€And€the€record€notes€that€thereÌis€a€long-standing€quibble.Ì€€€€€€€€All€right,€here€is€what€we€are€going€to€doÌhere.€€We€are€going€to€hear€from€Dave,€and€I€see€nowÌthat€Warren€Miller€has€come€from€ISA€to€replace€Albe.ÌWarren,€we€will€hear€from€you,€and€then€Linda,€did€youÌhave€something€--€we€will€hear€from€you,€and€then€theÌcoffee€is€done€and€we€will€take€a€break.Ì€€€€€€€€Dave?ÌÐ	   	 ì,'2   Ð€€€€€€€€MR.€GILLIS:€€Eileen,€the€point€I€want€to€make€isÌthat€this€illustrates€the€other€problem€that€weÌidentified€with€billing€for€calls€to€800€numbers,€andÌthat€was€that€the€local€exchange€companies€that€receivedÌthe€billing€tapes€system€did€not€permit€them€to€bill€forÌ800€numbers.€€So,€the€solution€to€that€was€to€describeÌthe€call€in€another€way,€so€that€people€eventually€gotÌbills€for€calling€card€services€and€other€things,€andÌit's€--€it€gives€rise€to€the€concern€upon€--€concern€ofÌ--€for€people€in€my€position,€and€I€think€it€raisesÌserious€question€in€the€minds€of€consumers€as€to€howÌthis€industry€works€and€why€they€can't€trust€their€phoneÌbill,€and€it's€that€sort€of€situation€that€has€to€beÌresolved,€I€think,€if€you're€going€to€go€forward€on€anÌestablished€basis€for€legitimate€services.Ì€€€€€€€€MS.€HARRINGTON:€€Linda?Ì€€€€€€€€MS.€GOLDSTEIN:€€Believe€it€or€not,€I€was€to€someÌextent€going€to€agree€with€what€Dave€just€said.Ì€€€€€€€€MS.€HARRINGTON:€€Excellent.Ì€€€€€€€€MS.€GOLDSTEIN:€€Just€really€more€by€point€ofÌclarification,€to€say€that€I€don't€--€I€don't€know€and€IÌdon't€want€to€presume€to€know€the€specifics€of€whatÌhappened€in€that€instance,€but€I€would€want€the€recordÌto€be€clear€that€I€don't€think€we€can€necessarily€agreeÌthat€that's€a€situation€of€phantom€billing,€that€thereÌÐ	   	 ì,'2   Ð--€that€there€is€an€issue€caused€by€the€limitationsÌplaced€by€the€LECs€on€how€certain€calls€can€beÌdesignated€on€the€billing€record,€and€some€of€theseÌissues€are€related€to€that€but€should€not€be€equated€toÌphantom€billing.€€It's€not€as€though€the€call€did€notÌoccur.Ì€€€€€€€€The€other€point€I€just€wanted€to€make€back€onÌwhat€can€be€done€here€and€the€collection€activities€isÌthat€I€think€the€singular€theme€that's€come€out€of€thisÌdiscussion€is€really€what€the€industry€is€asking€for€isÌtimeliness,€more€so€than€specifying€the€specificÌprocedures€or€what€form€those€procedures€have€to€take€isÌthe€timeliness,€and€that€the€timeliness€--€there€are€aÌnumber€of€other€issues€I€think€that€trickle€down€from€aÌfailure€to€get€that€information€in€a€timely€manner.Ì€€€€€€€€Obviously€there€is€the€unpredictability€of€theÌchargeback€and€the€havoc€that€that€wreaks€on€theÌinformation€provider.€€It€also€severely€impacts€anÌinformation€provider's€ability€to€measure€theÌeffectiveness€of€a€particular€advertising€program,Ìbecause€they€may€be€going€on€certain€data€based€onÌresponses€that€came€in,€only€to€find€out€six€to€nineÌmonths€later€that€that€data€was€totally€inaccurate,€andÌthey€have€acted€upon€that€for€a€series€of€months.€€So,Ìthere€is€sort€of€an€exponential€economic€impact€to€theÌÐ	   	 ì,'2   Ðconsumer€--€to€the€information€provider.Ì€€€€€€€€And€also,€I€believe€that€the€delay€probably€toÌsome€extent€also€stymies€the€process€and€contributes€toÌa€consumer's€inability€to€remember.€€When€you'reÌcontacting€a€consumer€nine€months€after€the€call€mayÌhave€been€made,€it's€far€less€likely€that€they€are€goingÌto€remember€that€than€30€to€60€days€after€the€call€wasÌplaced.Ì€€€€€€€€MS.€HARRINGTON:€€Warren?Ì€€€€€€€€MR.€MILLER:€€Thank€you,€my€name€is€WarrenÌMiller,€I'm€the€chair€of€the€Interactive€TelephoneÌCouncil,€the€ISA,€and€the€director€of€a€service€bureauÌhere€in€Washington.€€I€wanted€to€respond€to€yourÌquestion€about€the€responsiveness€of€informationÌproviders€as€well€as€Mark's€concern€about€the€disparityÌbetween€the€1€percent€inquiry€and€the€18€percentÌchargeback.€€I€have€some€very€specific€items€to€respondÌto.Ì€€€€€€€€When€TDDRA€was€enacted,€we€took€ourÌresponsibilities€as€a€service€bureau€very€seriously.€€WeÌrequired€every€information€provider€to€install€a€uniqueÌ800€number€for€their€service.€€We€populated€the€AT&TÌdata€base€with€that€800€number€on€a€recurring€basis,Ìmade€sure€that€information€was€up€and€correct.€€WeÌrecorded€and€required€a€14-day€hold€period€with€noÌÐ	   	 ì,'2   Ðerasure€provisions€for€us€to€be€able€to€examine€anyÌcomplaint€made€against€any€service€provider€to€theirÌ800.€€We€kept€that€information,€that€would€not€be€erasedÌuntil€housekeeping€in€14€days.Ì€€€€€€€€Every€day€for€four€years,€from€the€time€TDDRAÌwas€enacted€until€AT&T€took€back€billing,€at€a€staffÌmeeting€I€had€someone€report€to€me€every€Thursday€whatÌkind€of€complaints€had€reached€the€informationÌproviders,€and€the€answer€is€zippo.€€There€--€so,€theÌonly€conclusion€I€can€draw€is€a€lot€of€these€complaintsÌare€not€making€it€to€the€information€provider.Ì€€€€€€€€MS.€HARRINGTON:€€And€what's€the€nature€of€theÌinformation€that's€provided€by€your€--Ì€€€€€€€€MR.€MILLER:€€That's€a€good€question.€€DuringÌthat€period€of€time,€we€still€--€we€have€had€the€sameÌproduct€mix€all€along.€€We€don't€do€entertainmentsÌprograms.€€We€do€the€other€three€categories,€we€doÌsports,€we€do€voice€personals,€we€doÌbusiness-to-business€and€consumer.€€During€that€periodÌof€time,€we€probably€billed€tens€of€millions€of€dollarsÌand€had€tens€of€thousands€of€dollars€in€refunds.€€DuringÌthat€period€of€time,€the€chargeback€rate€went€from€5Ìpercent€to€10€percent,€but€during€that€same€time,€we€hadÌno€complaints.Ì€€€€€€€€MS.€HARRINGTON:€€That's€very€interesting.€€WeÌÐ	   	 ì,'2   Ðare€going€now€to€take€our€break.€€We€are€heading€intoÌthe€break€about€six€minutes€late,€so€we€are€going€toÌcome€back€at€3:50,€and€we€have€heard€now€on€this€billingÌand€chargeback€issue€from€both€industry€and€consumerÌperspectives.€€We€are€going€to€spend€the€rest€of€theÌworkshop€time€today€discussing€possible€solutions.€€So,Ìwe€would€like€everyone€to€think€about€--€hard€aboutÌcommon€ground€and€solutions€both.€€Then€we€will€haveÌpublic€participation€at€4:45.Ì€€€€€€€€Just€one€moment.€€Is€there€anyone€here€who€wantsÌto€participate€during€the€public€participation€part€ofÌthe€day?€€Ron,€you€don't€have€to€be€in€the€publicÌparticipation€part€of€the€day.€€Show€of€hands,€anyoneÌelse?Ì€€€€€€€€MR.€LESSER:€€There€is€someone€who's€not€here.Ì€€€€€€€€MS.€HARRINGTON:€€Someone€who€is€not€here,€aÌphantom€participant.€€Well,€we€are€going€to€have€RonÌIsaac,€who€is€a€staff€member€at€the€FTC,€join€us€upÌhere,€you€don't€have€to€participate€during€that€part,€soÌwe€will€begin€with€you€actually€in€the€next€session,€andÌthen€we€will€have€another€participant€who€is€unavailableÌor€we€may€not€know,€but€let's€resume€promptly€at€10€ofÌ4:00€to€work€on€solutions.Ì€€€€€€€€òò(A€brief€recess€was€taken.)Ð   	 Ì)ð#.   Ðóó€€€€€€€€MS.€HARRINGTON:€€We€have€had€a€couple€ofÐ   	 \+€%0   ÐÐ	   	 ì,'2   Ðquestions€about€our€requests€for€information€toÌsupplement€the€record.€€One€panicked€person€askedÌwhether€that's€due€by€tomorrow,€and€the€answer€is€no,Ìjust,€you€know,€this€is€an€ongoing€rulemaking.€€TheÌrecord€remains€open,€and€--€oh,€okay,€and€we€do€have€theÌmystery€person€identified.€€So,€anyway,€if€--€in€fact,Ìwe€have€--€if€you€have€additional€information€that€youÌwould€like€to€put€in€the€record,€please€do€that.Ì€€€€€€€€The€period€for€comments€in€response€to€the€ANPRÌclosed,€but€the€record€on€this€rulemaking€remains€open,Ìand€so€you€may€continue€to€submit€information€to€theÌrulemaking€record,€and€it€will€go€on€the€public€record.ÌWe€would€welcome€additional€information.Ì€€€€€€€€And€we€are€now€at€the€part€of€the€day€where€weÌwant€to€talk€about€solutions,€but€I€think,€Adam,€do€youÌhave€a€question€that€you€wanted€to€begin€with€before€weÌdo€that,€and€then€Ron€Isaac,€who€is€our€colleague€fromÌthe€Division€of€Credit€Practices,€wanted€to€make€aÌcouple€of€observations,€as€well.Ì€€€€€€€€You€didn't€want€to€ask€a€question?Ì€€€€€€€€MR.€COHN:€€No.Ì€€€€€€€€MS.€HARRINGTON:€€Okay,€Ron.€€Ron€is€an€attorneyÌin€the€Division€of€Credit€Practices,€and€he€was€part€ofÌthe€staff€team€that€did€the€work€to€promulgate€thisÌrule,€and€particularly€on€billing€and€collection.ÌÐ	   	 ì,'2   Ð€€€€€€€€MR.€ISAAC:€€Thank€you,€Eileen.Ì€€€€€€€€As€Eileen€said,€I'm€in€the€Division€of€CreditÌPractices,€and€it€was€our€division€that€wrote€theÌbilling€and€collection€section€of€the€rule,€and€we'reÌresponsible€for€its€support.Ì€€€€€€€€I€wanted€to€clarify€certain€issues€with€respectÌto€the€billing€and€collections€section,€because€I€haveÌheard€today€certain€statements€that€I€think€may€be€aÌlittle€confusing€as€to€exactly€what€the€rule€requires,Ìparticularly€with€respect€to€billing€entity.€€I€believeÌI€heard€it€said€earlier€that€billing€entities,Ìparticularly€the€LECs,€may€not€be€complying€with€theÌspirit€of€the€rule€by€not€--€refusing€to€--€not€refusingÌto€honor€disputes€that€have€not€been€filed€within€60Ìdays.Ì€€€€€€€€The€rule€does€not€require€a€billing€entity€toÌrefuse€to€honor€a€dispute€if€it's€not€filed€within€60Ìdays.€€The€rule€sets€out€a€certain€period€of€time€inÌwhich€a€billing€entity€must€treat€a€dispute€if€it'sÌfiled€within€that€60-day€time€period,€but€if€it'sÌsubmitted€subsequent€to€that€time,€there€is€nothing€inÌthe€rule€that€requires€a€billing€entity€to€refuse€toÌhonor€that€dispute.Ì€€€€€€€€The€rule€gives€the€billing€entity€the€right€toÌdecide€whether€or€not€they€want€to€continue€to€treatÌÐ	   	 ì,'2   Ðthat€dispute€as€a€legitimate€dispute€or€whether€or€notÌthey€want€to€decide€at€that€point€not€to€honor€itÌanymore.€€There€is€nothing€in€the€rule€or€in€the€Act,€IÌwould€say,€that€requires€a€billing€entity€to€turn€thatÌbilling€dispute€down€if€it's€not€filed€within€60€days.Ì€€€€€€€€Secondly,€the€rule€doesn't€require€a€billingÌentity€to€conduct€an€investigation€if€a€dispute€isÌsubmitted€by€a€consumer,€reasonable€or€otherwise.€€TheÌrule€gives€the€billing€entity€the€right€to€pass€thatÌcharge€back€to€the€IP€if€it€so€desires,€and€the€reasonÌit€was€written€this€way€is€because,€as€was€pointed€outÌearlier,€Congress€mandated€that€the€Commission€inÌdrafting€this€rule€consider€the€extent€to€which€theÌregulation€--€first€of€all,€we€shouldn't€draft€it€basedÌon€our€familiarity€with€the€billing€procedures€under€theÌFair€Credit€Billing€Act,€and€only€the€extent€to€which€weÌshould€diverge€from€those€requirements,€Congress€statedÌthat€we€should€do€so€in€order€to€protect€customers€andÌin€order€to€be€cost-effective€to€billing€entities.€€So,Ìin€drafting€the€rule,€we€kept€that€mandate€in€mind.Ì€€€€€€€€Now,€under€the€Fair€Credit€Billing€Act,€as€well,Ìif€a€credit€card€issuer€decides€not€to€charge€or€decidesÌto€charge€back€a€charge€to€the€--€to€the€merchant,€theyÌcan€do€so€at€any€time,€whether€it's€submitted€within€theÌ60-day€period€or€after.€€There€is€nothing€in€the€FairÌÐ	   	 ì,'2   ÐCredit€Billing€Act€that€requires€them€to€not€charge€thatÌback,€and€it's€the€same€with€respect€to€the€--€so,€weÌfollowed€the€procedures€in€the€Fair€Credit€Billing€ActÌin€drafting€the€rule€and€the€mandate€given€to€us€byÌCongress.Ì€€€€€€€€And€what€it€comes€down€to€is€that€we€felt€thatÌultimately,€there€were€certain€issues€that€were€bestÌleft€to€be€resolved€by€the€parties,€particularly€theÌbilling€entities€and€the€IPs€based€on€the€contract.€€AndÌit€was€always€understood€that€these€issues€ultimatelyÌwere€going€to€have€to€be€resolved€by€those€parties.Ì€€€€€€€€Now,€we€understand€that€because€of€the€nature€ofÌthe€technology,€that€to€a€large€degree€IPs€are€at€theÌmercy€of€the€carriers€with€respect€to€exactly€how€muchÌthey€can€impose€in€the€way€of€a€contract,€but€reallyÌwhether€or€not€the€Âé¶¹´«Ã½€Trade€Commission€should€beÌcharged€with€altering€the€positions€of€the€parties€inÌthat€situation,€I'm€not€sure€that€Congress€mandated€usÌto€do€that.€€Just€keep€that€in€mind.Ì€€€€€€€€MS.€HARRINGTON:€€Those€are€enlighteningÌcomments,€Ron,€thank€you.€€Or,€to€phrase€it€as€I€didÌearlier,€how€is€that€a€consumer€protection€issue.Ì€€€€€€€€Now€we€are€going€to€talk€about€solutions.€€WeÌhave€heard€about€the€problems€and€the€issues€from€theÌperspective€of€billing€entities€and€IPs€and€LECs€andÌÐ	   	 ì,'2   Ðfrom€consumers.€€How€can€we€move€to€resolve€some€ofÌthese€concerns?Ì€€€€€€€€Richard?Ì€€€€€€€€MR.€R.€GORDON:€€Well,€if€I€could,€I€would€justÌlike€to€make€a€brief€comment€on€the€statements€that€wereÌjust€made.Ì€€€€€€€€I€am€actually€much€more€active€in€the€creditÌcard€industry€than€I€am€in€the€pay-per-call€industry€forÌmy€profession,€and€it's€a€surprise€to€me€that€there€is€aÌ60-day€limitation€or€a€60-day€guideline€on€credit€cardÌchargebacks,€because€we€have€always€in€the€industryÌunderstood€it€to€be€180€days.Ì€€€€€€€€MS.€HARRINGTON:€€No,€that's€under€the€FairÌCredit€Billing€Act.€€Under€provisions€of€the€Truth€inÌLending€Act,€consumers€must€raise€their€disputes€withinÌ60€days€to€preserve€their€legal€right€to€be€free€fromÌadditional€collection€activities€and€so€on€and€so€forth,Ìand€the€same€standard€applies€in€the€TDDRA€rule,€asÌwell.Ì€€€€€€€€MR.€R.€GORDON:€€Then€what€I'm€talking€aboutÌreally€is€a€practical€approach€in€the€industry€whereÌonce€a€merchant€has€not€received€a€chargeback€within€180Ìdays,€the€chances€of€him€ever€receiving€a€chargeback€isÌclose€to€zero.Ì€€€€€€€€MS.€HARRINGTON:€€Well,€that€makes€Ron's€point€IÌÐ	   	 ì,'2   Ðthink€quite€nicely,€because€those€regulations€have€beenÌworked€out€among€the€private€parties€who€are€a€part€ofÌthat€payment€system€not€as€a€result€of€governmentÌregulation.Ì€€€€€€€€MR.€R.€GORDON:€€But€the€point€I€wanted€to€makeÌthere€when€we€as€an€industry€went€back€to€the€authors€ofÌthe€bill€and€Congress€and€said€we€have€got€this€problem,Ìchargebacks€are€coming€back€two€years,€a€year€and€a€halfÌlater,€we€were€told€that€can't€happen,€because€there€isÌa€60-day€limitation.€€We€asked€for€a€180-day€limitation,Ìand€what€we€were€told€by€the€members€of€Congress€was€inÌthe€Âé¶¹´«Ã½€Register,€they€interpreted€--€and€they€mayÌhave€done€it€wrong€--€but€they€interpreted€that€theseÌthings€had€to€be€done€in€60€days,€and€I€think€that€thatÌgets€to€the€issue€of€solutions€here,€which€is€reallyÌwhat€we're€all€looking€for.Ì€€€€€€€€I€know€today's€been€extremely€educational€for€meÌas€far€as€some€of€the€perspectives€brought€to€the€tableÌand€some€of€the€comments€made€by€everyone€who'sÌcontributing€here,€and€one€word€that€I€think€I€reactedÌto€the€same€as€some€others€did€was€"treatment."€€WhenÌtreatment€was€defined,€there€was€a€statement€made€whichÌI€think€is€right€on€point€as€far€as€what€we€need€as€anÌindustry€to€be€more€responsive€and€more€respectful€ofÌthe€consumer,€and€it€was€defined€as€when€we€put€someoneÌÐ	   	 ì,'2   Ðin€treatment,€we€take€into€effect€or€into€account€howÌlong€we€have€had€this€customer€and€what€is€the€chance€ofÌgetting€paid.Ì€€€€€€€€One€of€the€very€first€things€that€we€talkedÌabout€earlier€this€morning€was€there€are€certainÌnonprivate€information€that€is€maintained€by€the€LECs,Ìsuch€as€the€date€in€service.€€There€are€other€things,Ìtypes€of€service,€things€of€this€sort€that€the€phoneÌcompanies€and€the€billing€entities€have€at€theirÌdisposal.€€We€want€to€give€more€information€to€theÌpublic,€but€we€always€want€to€make€sure€that€the€publicÌthat€we're€dealing€with€is€not€trying€to€figure€out€waysÌto€get€through€the€backdoor€constantly.€€And€what€weÌneed€is€additional€information€so€that€our€treatment€canÌbe€effectuated€on€a€fair€and€equitable€basis.Ì€€€€€€€€Again,€I€want€to€make€sure€that€everyoneÌunderstands,€we're€not€talking€about€black€lists.ÌSomebody€used€that€phrase€this€morning,€it€sent€a€chillÌup€my€spine,€because€that's€not€what€we're€looking€for.ÌWhat€we're€looking€for€is€in€a€highly€automatedÌenvironment.€€If€you€need€to€handle€the€exceptions€on€aÌmanual€basis€rather€than€try€to€take€every€call€in€as€anÌexception,€and€if€we€know,€as€an€example,€again,€theÌdate€in€service,€whether€or€not€this€person€hasÌrequested€a€900€block,€that€gives€us€additionalÌÐ	   	 ì,'2   Ðintelligence,€and€the€software€and€the€development€thatÌcan€be€created€--€the€software€development€that€can€beÌcreated€with€that€information€will€give€us€predictableÌmodels.Ì€€€€€€€€This€has€worked€extremely€well€in€otherÌindustries,€and€I€think€that€it's€something€that€if€weÌcan€get€some€additional€assistance€from€the€LECs,€thatÌwe€would€be€able€to€significantly€reduce€the€costs€ofÌservice€to€everyone,€including€the€cost€of€chargebacks.Ì€€€€€€€€One€of€the€things€as€chairman€of€the€TSIA€IÌwould€like€to€encourage,€the€dialogue€here€today€hasÌbeen€extraordinary€for€at€least€those€of€us€on€this€sideÌof€the€table.€€We€have€learned€a€lot,€and€I€hope€that€weÌhave€been€able€to€give€back€in€the€form€ofÌcommunications€and€information€to€some€of€the€otherÌparticipants€in€the€meeting.€€I€understand€that€duringÌthe€rulemaking€process€we€can't€have€any€more€formalÌmeetings€or€they€are€restricted.€€We€would€like€toÌencourage€both€the€consumer€advocates€and€the€attorneyÌgenerals€and€the€LECs€to€establish€better€lines€ofÌcommunications€with€us.Ì€€€€€€€€What€you€said€earlier€I€think€is€exactly€theÌcase€here.€€In€the€credit€card€industry,€the€privateÌsector€has€pretty€well€been€able€to€work€these€thingsÌout,€and€I€think€one€of€the€reasons€that's€beenÌÐ	   	 ì,'2   Ðsuccessful€is€because€there€are€only€four€or€five€largeÌcredit€card€companies,€Visa,€Mastercard,€Discover,ÌAmerican€Express.Ì€€€€€€€€Unfortunately,€in€the€teleco€world,€there€areÌmany,€many€multiples€of€that€number€of€entitiesÌinvolved,€and€it's€a€little€bit€harder€to€get€everybodyÌtogether€to€communicate.Ì€€€€€€€€MS.€HARRINGTON:€€Let€me€ask€a€question,€Richard,Ìon€that€point.€€One€of€the€ideas€that€we€had€floated€inÌour€agenda€is€whether€there€is€some€way€that€theÌindustry€folks€can€get€together€to€set€up€some€disputeÌresolution€forum,€alternative€dispute€resolutionÌmechanism.€€Now,€that€could€be€in€our€agenda,€we€askedÌthat€question€with€respect€to€disputes€between€consumersÌwho€claimed€not€to€have€made€a€call€and€IPs€who€claimÌthat€it€was€made,€but€could€not€a€mechanism€like€that,Ìsince€there€are€so€many€different€players€in€thisÌindustry,€that€is,€there€are€consumers,€there€areÌinformation€providers,€there€are€service€bureaus,€thereÌare€LECs,€there€are€IXEs,€there€are€billing€entities€andÌbilling€clearinghouses,€couldn't€there€be€some€sort€ofÌdispute€forum,€dispute€resolution€forum€to€--€so€thatÌthese€disputes€between€information€providers€and€LECsÌcould€be€the€subject€of€some€sort€of€arbitration€orÌmediation?ÌÐ	   	 ì,'2   Ð€€€€€€€€MR.€R.€GORDON:€€I€think€that's€something€we€canÌwork€toward.€€One€of€the€problems€is,€of€course,€thatÌtakes€funding,€and€I€don't€know€how€many€entities€wouldÌbe€involved,€so€what€level€of€complexity€there€mightÌbe.€€Certainly€I€know€the€TSIA€will€be€very€proactive€inÌcontacting€the€people€at€the€table€and€saying,€If€you'veÌgot€a€real€issue€with€someone,€please€call€us,€let€usÌhelp€to€try€to€resolve€these€issues€so€that€they€don'tÌhave€to€rise€to€the€level€of€the€FTC€or€the€FCC.€€It'sÌbetter€for€us€to€maintain€a€quiet,€dull€roar€than€aÌshout€on€this€matter,€and€there€is€so€many€things€thatÌwe€can€resolve€internally.Ì€€€€€€€€I€mean,€I€think,€again,€some€of€the€terminologyÌthat€we€struggle€with€is€more€communication€thanÌanything€else.€€The€one€thing€that€I€know€we€standÌsteadfastly€for,€though,€is€we€do€need€conformity,€we€doÌneed€uniformity.€€There€was€some€discussion€earlier€thisÌmorning€about€the€different€types€of€chargeback€codesÌand€the€different€types€of€billing€records,€and€whileÌthere€are€some€standards,€I€understand€there€is€as€manyÌvariations€in€the€standard€as€there€are€standards.Ì€€€€€€€€So,€it's€very€hard€to€standardize€anÌunstandardized€practice,€and€what€--€again,€we€go€backÌto€a€statement€on€the€billing€record.€€We€believe€thatÌthere€really€has€to€be€more€than€a€model,€because€ifÌÐ	   	 ì,'2   Ðthere€is€a€model,€people€will€vary€from€it,€and€thenÌthings€like€happened€with€Peter,€where€there€is€suchÌvast€divergence€in€different€geographical€parts€of€theÌcountry.Ì€€€€€€€€The€people€in€Tampa€don't€have€any€differentÌdegree€of€literacy€than€the€people€in€Topeka,€and€yetÌwhen€you€have€got€this€kind€of€vast€statistical,Ìbroad-based€difference,€it€can€really€only€be€attributedÌto€the€noncommon€point,€the€noncommon€point€being€theÌway€that€the€LEC€treats€that€particular€item.Ì€€€€€€€€Okay.Ì€€€€€€€€MS.€HARRINGTON:€€Jill?Ì€€€€€€€€MS.€SANDFORD:€€I€have€found€today€to€beÌtremendously€informing€but€certainly€learned€quite€a€bitÌabout€the€industry€as€well€as€all€the€different€playersÌand€the€levels.€€We€have€also€heard€quite€a€bit€ofÌfinger-pointing€today,€which€I€do€find€interesting.€€TheÌbottom€line€is€the€problems€that€we€have€identifiedÌtoday€do€exist.€€Moving€forward,€looking€at€theÌsolutions,€I€think€there€are€front-end€issues€and€thenÌthere€are€back-end€issues.Ì€€€€€€€€At€the€front€end,€we€have€identified€theÌauthorization€issue.€€I€think€a€greater€use€ofÌpresubscription€agreements,€I€think€the€industry€needsÌto€develop€a€mechanism€to€ensure€that€the€consumer€trulyÌÐ	   	 ì,'2   Ðdoes€authorize€the€call,€that€the€subscriber€of€recordÌis€the€one€who€authorizes€the€call,€and€then€it's€okayÌto€have€the€presumption€that€the€consumer€or€theÌsubscriber€of€record€will€pay€for€that€call.Ì€€€€€€€€On€the€back€end,€I€think€the€colloquy€betweenÌWalt€and€Kim€clearly€illustrated€the€problem.€€I€thinkÌif€someone€makes€the€900€number€call,€it€should€beÌbilled€as€a€900€number€call.€€If€someone€makes€an€800Ìnumber€call,€it€should€not€be€billed€as€an€internationalÌcall.€€Whatever€the€consumer's€method€of€calling€or€theÌpay-per-call€service,€that€should€be€what€appears€on€theÌbill.€€If€the€industry€has€trouble€dissecting€what€is€onÌthe€bill€and€the€origin€of€the€call,€I€don't€see€how€weÌcan€expect€the€consumers€to€wade€through€all€of€thatÌinformation.Ì€€€€€€€€Something€that's€been€brought€up€today€and€hasÌbeen€repeated€is€the€timeliness€issue€of€reporting€theÌdisputes€and€getting€back€to€the€IPs.€€I'm€going€toÌfloat€this€out€here,€would€it€help€the€IPs€and€theÌindustry€to€have€what€I'll€call€the€true€party€inÌinterest€on€the€bill€instead€of€having€the€consumer€haveÌto€go€through€the€LEC€and€then€a€billing€aggregator,Ìhave€the€IP's€name€and€800€number€on€the€bill?€€ThatÌway,€the€consumer€can€deal€directly€with€the€IP,€andÌalso€I€think€it's€to€the€advantage€of€the€informationÌÐ	   	 ì,'2   Ðproviders€to€have€a€consumer,€when€they€call€them,€to€beÌopen€to€discuss€the€problem€as€opposed€to€having€goneÌthrough€three€layers,€and€by€the€time€they€even€get€toÌthe€IP,€they€are€so€annoyed€at€the€whole€process€thatÌit's€even€harder€to€work€through€the€dispute.Ì€€€€€€€€I€certainly€agree€that€we€need€to€haveÌuniformity€in€the€dispute€resolution€practices.€€One€ofÌthe€things€that€we€see€in€our€complaints€is€anÌinconsistency€on€how€complaints€are€dealt€with.€€ItÌalmost€appears€like€a€squeaky€wheel.€€The€consumer€whoÌyells€the€loudest€often€times€gets€the€chargeback€orÌgets€the€charge€refunded.€€I€really€think€there€needs€toÌbe€a€consistency€of€factors€that€the€industry€abides€byÌin€determining€whether€a€charge€should€be€sustained€orÌwhether€the€call€should€be€recoursed.Ì€€€€€€€€Something€I've€learned€today€which€I€think€needsÌto€be€applied€at€the€LEC€level€is€the€existence€of€theÌbilling€record,€and€I€think€it€was€called€the€AMA,€whichÌallows€the€LEC€to€actually€determine€whether€a€call€wasÌmade,€and€I€think€if€the€time€is€taken€when€a€consumerÌcalls€up€to€differentiate€between€a€call€that€wasÌactually€made€and€one€that€was€a€phantom€call€at€theÌgit-go,€when€the€consumer€first€complains,€both€the€LECÌwill€be€able€to€identify€a€pattern,€as€well€as€report€toÌlaw€enforcement€what's€going€on.ÌÐ	   	 ì,'2   Ð€€€€€€€€I€mean,€the€pattern€of€our€complaints€is€it'sÌeither€feast€or€famine.€€We€may€have€one€or€twoÌcomplaints€that€we're€able€to€resolve€through€aÌmediation€or€we€have€a€flood€of€complaints€against€aÌparticular€billing€entity€or€IP,€and€they€tend€to€beÌacross€the€board€phantom€calls.€€So,€we€can€reallyÌdistinguish€when€it€may€be€a€misunderstanding€betweenÌthe€consumer€and€the€IP€or€the€billing€entity€or€whenÌthere€is€a€significant€problem.Ì€€€€€€€€MS.€HARRINGTON:€€Thank€you,€Jill.Ì€€€€€€€€Let€me€ask€you,€Albe's€next€on€the€list,€let€meÌask€you€first€to€respond€to€Jill's€question€aboutÌwhether€the€IPs€would€be€in€favor€of€having€the€actualÌcreditor's€name€or€actual€provider's€name€appear€on€theÌstatement€and€then€whatever€else€you€wanted€to€say.Ì€€€€€€€€MR.€ANGEL:€€Okay,€the€answer€is€that€it€doesÌappear€on€the€bill.€€In€the€900€billing€regimen,€inÌorder€to€initiate€an€information€service,€there€is€anÌinformation€service€application,€and€the€carrierÌrequires€that,€and€there€has€to€be€a€specific€serviceÌdescription,€and€that€service€description€responds€to€aÌspecific€provider,€but€that€doesn't€necessarilyÌtranslate€to€that€provider€is€responding€on€the€billingÌinquiry.Ì€€€€€€€€Literally,€what€happens€is€that€when€the€page€isÌÐ	   	 ì,'2   Ðrendered€to€the€consumer,€at€the€bottom€of€that€page€isÌthe€800€number€or€local€number€that€the€consumer€canÌcall€in€order€to€deal€with€that€particular€charge.Ì€€€€€€€€MS.€HARRINGTON:€€But€can€--€the€billing€entityÌ--€the€provider€is€not€identified€on€the€bill.Ì€€€€€€€€MS.€WILLIAMS:€€It€can€be.Ì€€€€€€€€MS.€SCHWANKE:€€Isn't€it€the€type€of€serviceÌthat's€identified?Ì€€€€€€€€MR.€ANGEL:€€Let€me€go€through€this.€€TheÌidentification€of€the€provider€is€dealt€with€in€theÌrules,€because€both€in€the€advertisement€and€theÌpreamble€to€a€certain€extent€there€is€an€identificationÌof€the€service€and€the€provider.Ì€€€€€€€€MS.€HARRINGTON:€€But€not€on€the€bill.€€There€isÌno€requirement€in€the€rule€that€--Ì€€€€€€€€MR.€ANGEL:€€Understood,€understood.€€On€theÌbill,€there€is€a€limitation€in€terms€of€what€canÌactually€be€printed€on€the€bill€as€a€result€of€how€manyÌcharacters€are€allotted,€how€many€little€spaces€you€haveÌon€the€bill€as€a€function€of€the€EMI€format,€the€basicÌformat€that's€being€used€to€transmit€telephonic€billingÌmessages.Ì€€€€€€€€MS.€SCHWANKE:€€And€the€telephone€number€thatÌappears€on€the€bill€is€the€organization€that€has€agreedÌto€deal€with€the€billing€inquiries,€not€necessarily€theÌÐ	   	 ì,'2   Ðinformation€provider.Ì€€€€€€€€MR.€ANGEL:€€Right.€€Is€that€clear?€€Now,€I€guessÌthe€proposal€--Ì€€€€€€€€MS.€HARRINGTON:€€Well,€that's€clear,€and€it'sÌclearly€different€than€what€Jill€is€proposing.€€So,Ìwe're€interested€in€knowing€what€you€think€about€whatÌJill€is€proposing,€which€would€identify€the€provider€onÌthe€bill.Ì€€€€€€€€MR.€ANGEL:€€If€I€understand€Jill's€proposalÌcorrectly,€it's€that€the€ultimate€information€provider'sÌ800€number€appear€on€the€bill€so€that€if€a€consumer€hasÌan€inquiry,€that€that€can€be€directed€directly€to€theÌinformation€provider,€correct?Ì€€€€€€€€There€is€a€factual€--€a€pragmatic€difficultyÌwith€that€in€that€many€information€providers€are€notÌpositioned€to€handle€billing€inquiries€that€might€beÌcoming€in€on€a€regular€basis€during€the€day.€€They€payÌbilling€entities€for€that€service€to€be€provided.€€TheyÌare€available€to€respond€to€anything€that€the€billingÌentity€cannot€answer€or€cannot€resolve,€but€--Ì€€€€€€€€MS.€HARRINGTON:€€All€right,€well,€let€me€ask€youÌthis€question,€Albe,€though.Ì€€€€€€€€MR.€ANGEL:€€Go€ahead.Ì€€€€€€€€MS.€HARRINGTON:€€If€they€don't€positionÌthemselves€to€provide€that€information€to€consumers€andÌÐ	   	 ì,'2   Ðthey€have€paid€a€billing€entity€to€do€that€for€them,Ìthen€why€shouldn't€a€consumer€protection€regulationÌdictate€the€terms€of€the€agreement€between€theÌinformation€provider€and€the€billing€entity€with€regardÌto€timeliness?Ì€€€€€€€€I€mean,€this€sounds€to€me€like€a€series€ofÌprivate€business€decisions€that€are€being€made€byÌinformation€providers,€and,€you€know,€I'm€sort€ofÌmissing€why€it€is€that€the€Telephone€Disclosure€andÌDispute€Resolution€Act,€which€was€intended€to€protectÌthe€consumers,€without€unduly€burdening€industry,€shouldÌget€involved€in€terms€of€handling€information€andÌdisputes€between€private€parties€on€the€business€side.Ì€€€€€€€€MR.€ANGEL:€€In€order€to€give€you€a€reallyÌintelligent€answer€on€that,€we€really€need€to€step€backÌand€look€at€the€industry€and€how€it€operates€from€aÌbird's€eye€view.€€For€every€inquiry€that€we'reÌaddressing€here,€the€one€out€of€a€hundred€calls€that€areÌbeing€made,€there€is€a€further€percentage€of€calls€thatÌare€satisfactorily€handled€on€the€first€call.€€So,Ìrealistically,€if€a€hundred€calls€were€made€and€oneÌresults€in€an€inquiry€and€half€of€those€calls€areÌsatisfactorily€resolved€in€the€first€call,€we're€dealingÌwith€a€fraction.Ì€€€€€€€€Now,€that€fraction€has€amounted€to€chargebacksÌÐ	   	 ì,'2   Ðin€the€amount€of€$200€million€for€the€industry.€€TheÌindustry€is€responding€that€there€is€a€structuralÌproblem€here,€and€we,€just€as€you€stated€earlier,€youÌsaid€why€isn't€there€an€alternative€billing€disputeÌmechanism?€€Well,€why€isn't€there€a€forum?Ì€€€€€€€€Well,€in€fact,€the€ISA€did€just€that.€€With€theÌU.S.€Office€of€Consumer€Affairs,€in€October€of€1995,Ìthey€held€a€meeting,€and€they€had€a€further€meeting,€andÌthen€the€result€of€the€third€meeting€was€a€formal€taskÌforce,€and€the€task€force€was€to€come€forward€with€adÌhoc€recommendations,€and€those€are€the€ones€that€areÌappended€to€our€comments,€and€literally,€we€hadÌparticipation€from€the€National€Association€of€AttorneyÌGenerals€and€interested€LECs,€and€it€was€really€broadÌparticipation.€€And€the€recommendation€was€timeliness,Ìget€the€information€back€to€the€IP€or€service€bureauÌimmediately€rather€than€having€it€clog€up€the€system€andÌresult€in€such€chargebacks.€€That's€really,€you€know,€aÌquick€answer€to€your€question.Ì€€€€€€€€But€if€you€want€to€focus€on€the€very€narrowÌissue€of€whether€or€not€an€800€number€should€appear€forÌan€IP,€the€industry€wasn't€grown€that€way,€wasn'tÌstructured€to€accomplish€that,€and€there€are€many,€manyÌIPs€that€provide€wonderful€services€and€continue€toÌprovide€value€that€won't€be€able€to€provide€thoseÌÐ	   	 ì,'2   Ðservices€if€this€new€requirement€is€imposed€withoutÌprior€notice.Ì€€€€€€€€MS.€SANDFORD:€€May€I€--Ì€€€€€€€€MS.€HARRINGTON:€€Ah,€I€am€going€to€ask€Kim,€andÌthen€Jill,€I'll€come€back€to€you.Ì€€€€€€€€MS.€WILLIAMS:€€I€wanted€to€address€putting€anÌIP's€name€on€the€bill.€€I€know€we€have€at€least€oneÌstate€that€requires€that€we€do€show€the€underlyingÌcarrier's€name€on€the€bill.€€We€call€it€subentityÌbilling€--Ì€€€€€€€€MS.€HARRINGTON:€€Carrier€or€IP?Ì€€€€€€€€MS.€WILLIAMS:€€I€think€it's€the€underlyingÌcarrier€they€ask€we€show.€€I'm€not€sure€how€the€ruleÌactually€reads,€but€--Ì€€€€€€€€MS.€HARRINGTON:€€For€the€record,€what€state€isÌthat?Ì€€€€€€€€MS.€WILLIAMS:€€Kansas.€€So,€I€have€a€billingÌentity€who€has€a€contract€with€me,€and€on€their€bill,Ìcharges€are€broken€out€by€subentity,€and€it€will€sayÌbilled€on€behalf€of€and€list€the€name€of€that€subentityÌand€list€the€calls€underneath.€€We€can€actually€will€IÌshow€an€800€number€for€each€subentity,€but€I€don't€thinkÌmany€carriers€or€customers€have€opted€to€show€theÌnumber.€€In€fact,€I€think€a€lot€of€IPs€can't€even€beÌreached.€€When€we€refer€customers€to€billing€entities,ÌÐ	   	 ì,'2   Ðthey€offer€that€you€can€write€to€them,€the€IP,€but€notÌthat€you€can€reach€the€IP€by€phone,€and€we€do€have€a€lotÌof€complaints€about€that.Ì€€€€€€€€MR.€ANGEL:€€May€I€respond?Ì€€€€€€€€MS.€HARRINGTON:€€We€are€going€to€go€to€Jill,€andÌAlbe,€you€can€respond€after€that.Ì€€€€€€€€MS.€WILLIAMS:€€One€other€thing€that€Jill€said,Ìon€the€AMA€tape€issue,€I€just€want€to€make€sure€nobodyÌthinks€that€is€an€easy€thing€to€get€to.€€Again,€it's€inÌthe€central€office,€and€there€are€many,€hundreds€andÌhundreds€and€thousands€and€thousands,€and€for€me€to€goÌget€that€record€is€not€an€easy€thing.€€It€is€not€a€thingÌdone€on€the€line€with€the€customer.€€It€takes€a€coupleÌof€weeks€to€get€a€response€back€from€a€central€officeÌwhere€I€might€have€a€couple€of€people€walking€around,Ìwho€are€working€there€and€taking€care€of€the€actualÌextra€office.Ì€€€€€€€€So,€it€is€not€something€that€I€think€is€an€easyÌanswer€to€whether€a€call€was€really€made€or€not.€€IÌthink,€number€one,€making€it€against€the€law€for€anybodyÌto€send€a€call€record€that€was€never€made€would€help.ÌWhether€it€is€or€not,€I€don't€know.€€I€know€it's€againstÌmy€billing€contracts,€but€I€am€left€to€try€to€enforceÌthat€based€on€customer€complaints.Ì€€€€€€€€MS.€SANDFORD:€€To€just€get€back€to€your€point,ÌÐ	   	 ì,'2   Ðif€the€IP€does€not€have€the€capabilities€to€service€anÌ800€number€or€consumer€inquiries,€then€I€think€that€theÌ800€number€for€the€billing€entity€should€also€have€theÌauthority€to€be€the€last€stop€for€consumer€credits,€asÌwell€as€to€recourse€and€refund€the€charges,€that€whoeverÌis€on€the€phone€bill€should€be€the€stop€for€theÌconsumers€who€also€has€the€authority€to€handle€theÌdispute,€and€ultimately,€if€it's€found€that€it€is€anÌunauthorized€or€phantom€charge,€take€that€charge€off€theÌbill.Ì€€€€€€€€What€we€are€seeing,€though,€is€you€have€aÌbilling€entity's€number€on€the€phone€bill,€the€consumerÌcalls€them€up,€and€they€say,€Oh,€well,€we're€just€aÌbilling€entity.€€You€have€to€call€this€other€number.ÌAnd€I€think€whoever€is€on€the€bill,€if€the€IP€has€chosenÌto€avail€themselves€of€the€billing€entity€as€well€asÌhaving€the€billing€entity's€800€number€on€the€consumer'sÌtelephone€bill,€they€should€also€have€the€authority€toÌhandle€the€dispute.Ì€€€€€€€€MS.€HARRINGTON:€€Mark?Ì€€€€€€€€MR.€ANGEL:€€May€I€respond?Ì€€€€€€€€MR.€HERTZENDORF:€€A€quick€question€for€Kim.€€AreÌchargebacks€any€lower€in€Kansas?Ì€€€€€€€€MS.€WILLIAMS:€€Not€that€I€know€of,€no.€€I€mean,ÌI€don't€know€that€that€really€makes€any€difference.ÌÐ	   	 ì,'2   Ð€€€€€€€€MS.€HARRINGTON:€€Okay.Ì€€€€€€€€Albe?Ì€€€€€€€€MR.€ANGEL:€€As€far€as€I€know,€I€may€stand€to€beÌcorrected€here,€billing€entities€do€have€full€authorityÌto€make€any€satisfactory€resolution€that€they€see€fitÌunder€authority€given€both€by€the€IP€and€the€serviceÌbureau€that€might€service€that€IP,€so€that€a€function€ofÌthe€billing€and€collections€agreement€that€the€carriers,ÌAT&T€and€MCI€in€this€case,€institute€with€their€900Ìservice€customers€is€that€the€billing€entity,€whether€itÌbe€their€own€inquiry€and€bill€resolution€department€orÌthat€of€a€LEC,€be€empowered€to€make€a€full€resolution.Ì€€€€€€€€Secondarily,€to€the€extent€that€there€areÌthird-party€billing€entities,€to€the€best€of€myÌknowledge,€they€all€similarly€mirror€that€same€languageÌin€their€contracts€with€their€IPs,€and€it's€the€rareÌcase€where€a€consumer€does€not€get€satisfaction€and€isÌreferred€to€an€information€provider€who€is€evadingÌcalls.€€I€mean,€we're€really€talking€about€millions€andÌmillions€and€millions€of€calls€that€are€being€made,Ìhandled€satisfactorily,€and€a€very€small€sample€ofÌanecdotal€information€is€coming€up€here€where€people€areÌgetting€the€runaround,€and,€you€know,€unless€we€addressÌthose€on€a€case-by-case€basis,€it's€hard€to€addressÌthem.ÌÐ	   	 ì,'2   Ð€€€€€€€€MS.€HARRINGTON:€€All€right,€and€I€think€weÌunderstand€that€what€the€information€providers€areÌsaying€is€that€their€issue€is€simply€that€of€the€delayÌin€the€--€between€the€time€of€the€billing€and€the€--€andÌthe€ultimate€resolution€by€the€billing€entity.€€WeÌunderstand€that.Ì€€€€€€€€Okay,€Marianne€had€her€card€up€first.Ì€€€€€€€€MS.€SCHWANKE:€€For€those€consumer€disputes€thatÌaren't€resolved€satisfactorily,€could€you€or€couldÌsomebody€address€the€feasibility€of€developing€some€kindÌof€industrywide€alternative€dispute€resolutionÌmechanism?€€There€are€other€industries€that€haveÌdeveloped€such€a€mechanism€for€resolving€disputes.Ì€€€€€€€€MS.€HARRINGTON:€€First€Walt,€then€Ron.Ì€€€€€€€€MR.€STEIMEL:€€Okay,€it€seems€like€part€of€theÌproblem€here€is€that€in€many€instances€the€LEC€is€theÌarbiter€with€the€consumer€on€whether€or€not€the€chargeÌwas€legitimate,€and€the€industry€doesn't€trust€the€LEC,Ìand€the€LEC€thinks€it's€unfair,€and€I€think€both€ofÌthose€are€legitimate€complaints.Ì€€€€€€€€One€thing€we€would€like€to€suggest€is€maybe€anÌindustry-funded€dispute€resolution€mechanism€that€couldÌbe€overseen€by€the€FCC€Informal€Complaints€Division.ÌMost€disputes€are€already€sent€to€them.€€Consumers€andÌLECs€already€view€that€department€as€the€place€to€go€forÌÐ	   	 ì,'2   Ðhelp€and€a€department€that€is€already€familiar€with€manyÌof€the€issues€involved.€€The€funding€for€the€addedÌburden€could€be€resolved€through€increased€fees,€whichÌcould€be€paid€by€the€billing€entity.€€When€I€say€billingÌentity,€I€don't€mean,€like,€you€guys;€I€mean,€like,€usÌguys,€just€to€make€that€clear.Ì€€€€€€€€MS.€HARRINGTON:€€For€the€record,€"you€guys"€areÌthe€LECs€and€"us€guys"€are€the€--Ì€€€€€€€€MR.€STEIMEL:€€Are€the€interexchange€carriers€andÌthe€major€providers,€as€such.€€The€arbitration,€or€inÌaddition,€the€complaint€mechanism€could€go€through€anÌarbitration€basis€in€extreme€situations,€which€could€beÌaccomplished€on€a€voluntary€per-use€basis.€€The€billingÌentity€would€either€use€the€existing€process,€which€isÌto€resolve€a€dispute€directly€with€the€consumer€withinÌthe€formal€complaints€department€as€a€passive€observerÌor€the€billing€entity€at€its€sole€option€could€pay€a€feeÌto€submit€the€issue€to€arbitration.Ì€€€€€€€€We€believe€this€process€might€demonstrateÌindependence€from€LECs,€IXEs€and€IPs,€confidentialÌtreatment€of€parties'€business€methods€and€theÌindividual€dispute€information.€€The€disputes€would€beÌarbitrated€or€mediated€only€when€the€party€issuing€theÌbill€agrees€to€it,€and€the€informal€complaintsÌdepartment€could€ensure€that€the€entire€processÌÐ	   	 ì,'2   Ðcomported€with€existing€laws,€rules€and€regulations,€andÌthere€would€be€--€the€LECs€would€be€taken€out€of€theÌloop€on€trying€to€determine€things€in€which€they€did€notÌhave€firsthand€information€when€they€were€billing€toÌthird€parties.€€In€addition,€the€parties€that€were€theÌbilling€entities€would€not€feel€like€the€LECs€wereÌforgiving€charges€without€a€legitimate€basis.Ì€€€€€€€€MS.€HARRINGTON:€€Okay,€thank€you,€Walt.Ì€€€€€€€€We€are€going€to€go€to€Ron€and€then€to€Susan.Ì€€€€€€€€MR.€GOLDBRENNER:€€Good€afternoon,€my€name€is€RonÌGoldbrenner€of€the€Professional€Marketing€Association.ÌEileen,€I'm€a€little€bit€confused,€if€I€may€ask€you€aÌcouple€of€questions.€€You€said€that€the€Fair€Credit€--Ì€€€€€€€€MS.€HARRINGTON:€€Ron,€I€actually€called€on€youÌto€answer€Marianne's€question.Ì€€€€€€€€MR.€GOLDBRENNER:€€I€have€a€question€on€theÌ60-day€rule.Ì€€€€€€€€MS.€HARRINGTON:€€We€will€get€back€to€you.Ì€€€€€€€€Susan?Ì€€€€€€€€MS.€GRANT:€€I€wanted€to€start€by€saying€that€IÌam€not€unsympathetic€to€the€billing€and€collectionÌproblems€that€members€of€the€industry€have,€but€I€thinkÌthat€a€lot€of€the€problems€that€we've€been€discussingÌtoday€are€things€that€need€to€be€resolved€between€thoseÌbusiness€entities€and€really€are€not€appropriate€for€theÌÐ	   	 ì,'2   ÐFTC€to€attempt€to€resolve€through€the€rule.€€This€is€aÌconsumer€protection€rule,€and€I€think€that€we€may€loseÌfocus€of€that€as€we€talk€about€these€problems.Ì€€€€€€€€I€think€that€some€of€the€problems€that€we€haveÌlearned€about€from€the€industry€have€to€do€with€theÌstructure€of€a€business€that€they€have€structured,€andÌthat€if€that's€not€--€if€that€structure€is€not€workingÌwell,€then€maybe€it's€incumbent€upon€the€industry€toÌtake€another€look€at€alternatives.Ì€€€€€€€€It€was€mentioned€just€in€passing€but€really€notÌexplored€that€direct€billing,€for€instance,€was€moreÌexpensive€than€having€your€billing€done€through€a€LEC,Ìbut€I€don't€know€how€that€compares€with€the€amount€ofÌmoney€that€is€being€lost€due€to€chargebacks€and€whetherÌit€would€have€repaid€some€of€the€chargeback€problems€andÌultimately€turn€out€to€be€a€more€economic€solution€toÌthe€problem.Ì€€€€€€€€I'll€second€what€has€already€been€said€aboutÌmore€use€of€presubscription€agreements,€which€I'd€reallyÌlike€to€see€in€writing€in€order€to€have€someÌdocumentation€of€their€existence,€and€I€think€there€areÌsome€other€alternatives,€as€well.€€Perhaps€the€industryÌcould€set€up€a€service€similar€to€the€mail€and€telephoneÌpreference€services€that€Direct€Marketing€AssociationÌmaintains€for€consumers€to€opt€out€of€getting€--€ofÌÐ	   	 ì,'2   Ðhaving€the€ability€to€have€certain€of€these€calls€madeÌfrom€their€phones.Ì€€€€€€€€MS.€HARRINGTON:€€Beyond€900,€because€theyÌalready€have€the€900€block.Ì€€€€€€€€MS.€GRANT:€€Right,€beyond€900.€€It's€not€goingÌto€eliminate€the€problems€and€certainly€we€know€that€theÌmost€fraudulent€companies€out€there€will€probably€not€beÌmembers€of€--€of€such€an€industry€organization,€but€itÌmay€reduce€problems,€help€to€reduce€problems€at€anyÌrate.Ì€€€€€€€€I€like€the€idea€of€an€alternative€disputeÌmechanism€for€consumers,€although,€you€know,€I€wouldÌhave€concerns€about€how€easily€accessible€and€objectiveÌit€would€be€and€whether€it€would€be€binding€or€whetherÌconsumers€would€still€have€recourse,€but€ultimately,Ìwhen€it€comes€right€down€to€it,€what€reallyÌdistinguishes€most€of€the€pay-per-call€industry€andÌgives€rise€to€most€of€our€concerns€is€the€fact€that€itÌis€billed€primarily€through€consumers'€phone€bills,€andÌI€think€that€there€is€more€than€just€convenience€for€theÌcompanies€involved.Ì€€€€€€€€I€think€that€consumers'€telephone€service€is€aÌreally€basic€right€that€we€can't€do€anything€in€order€toÌhelp€the€industry€with€its€collection€problem€that€wouldÌendanger€consumers'€rights€to€basic€telephone€serviceÌÐ	   	 ì,'2   Ðand€to€kinds€of€telephone€services€that€may€be€developedÌin€the€future€that€consumers€want€to€avail€themselves€ofÌand€need.Ì€€€€€€€€MS.€HARRINGTON:€€Thank€you,€Susan.Ì€€€€€€€€One€area€that€I€really€would€like€to€hear€someÌdiscussion€on€as€we€move€through€the€rest€of€theÌparticipants€who€want€to€participate€here€is€the€notionÌof€the€problem€caller€data€base,€which€is€one€solutionÌthat€has€been€proposed€by€some€in€their€comments.€€So,ÌI'm€going€to€continue€to€call€on€people,€but€--Ìactually,€Don€had€to€leave,€so€if€you€wait€long€enough,Ìyou're€gone.Ì€€€€€€€€All€right,€Ron?Ì€€€€€€€€MR.€GOLDBRENNER:€€May€I€--€may€I€speak€about€theÌ60-day€rule€or€--Ì€€€€€€€€MS.€HARRINGTON:€€Sure,€sure,€but€I€also€wouldÌlike,€if€you€have€got€a€comment€on€the€problem€callerÌdata€base,€too,€we€would€like€to€hear€that.Ì€€€€€€€€MR.€GOLDBRENNER:€€Should€I€start€with€the€60-dayÌrule?Ì€€€€€€€€MS.€HARRINGTON:€€Whatever€you€want€to.Ì€€€€€€€€MR.€GOLDBRENNER:€€I€understood€you€to€say€beforeÌthat€Fair€Credit€required€the€consumer€to€file€theirÌnotice€within€60€days.Ì€€€€€€€€MS.€HARRINGTON:€€For€a€consumer€to€assert€his€orÌÐ	   	 ì,'2   Ðher€rights€under€the€Fair€Credit€Billing€Act,€the€noticeÌhas€to€be€served€up€in€60€days.Ì€€€€€€€€MR.€GOLDBRENNER:€€And€that€the€FTC's€rule€isÌintended€to€follow€that.Ì€€€€€€€€MS.€HARRINGTON:€€Well,€the€statute€that€directedÌus€to€promulgate€the€rule€directed€that€it€follow€theÌFair€Credit€Billing€Act€billing€dispute€provisionsÌunless€there€was€some€good€reason€not€to.Ì€€€€€€€€MR.€GOLDBRENNER:€€And€as€I€read€the€rule€as€it'sÌstated,€it€seems€to€require€a€consumer€to€file€theirÌnotice€within€60€days.Ì€€€€€€€€MS.€HARRINGTON:€€It€doesn't€preclude€--€I€thinkÌthe€point€that€Ron€is€making€is€that€there€is€nothing€inÌthe€rule€that€precludes€the€billing€entity€fromÌconsidering€a€dispute€that€arises€after€the€60-dayÌperiod.€€That's€the€--Ì€€€€€€€€MR.€GOLDBRENNER:€€Well,€that's€where€I€wouldÌtake€issue.€€I€think€there€is€nothing€in€the€rule€whichÌprecludes€the€carrier€from€acting€upon€the€notice€afterÌ60€days,€but€if€the€notice€doesn't€come€in€within€60Ìdays,€then€it€is€not€a€valid€notice€within€theÌregulation,€and€as€a€matter€of€law,€the€carrier€mustÌreject€it.€€There€are€two€aspects€--Ì€€€€€€€€MS.€HARRINGTON:€€It€doesn't€say€that,€Ron.Ì€€€€€€€€MR.€GOLDBRENNER:€€Well,€if€I€may€finish,€thereÌÐ	   	 ì,'2   Ðare€two€aspects€to€the€chargeback€situation.€€TheÌregulation€sets€forth€a€threshold€that€the€consumer€mustÌmeet,€the€consumer€must€file€within€60€days.€€WhateverÌrights€the€carrier€has,€the€rule€requires€the€consumerÌto€act€within€60€days.Ì€€€€€€€€The€carrier€does€not€have€the€right€to€restoreÌthe€consumer's€late€notice€by€acting€upon€it€after€theÌ60€days.€€The€carrier€has€the€right€not€to€act€upon€itÌwithin€the€60€days,€but€the€carrier€cannot€re-awaken€aÌnotice€that€is€illegal€and€not€appropriate,€and€I€thinkÌthat's€the€point€that€the€industry€is€trying€to€make,Ìand€the€industry€is€trying€to€make€the€point€that€thereÌare€two€problems€here,€both€of€which€should€be€solved,Ìboth€of€which€would€help€the€industry,€and€neither€ofÌwhich€would€hurt€consumers,€because€I€think€we€will€allÌaccept€the€fact€that€at€some€point,€a€claim€is€stale.Ì€€€€€€€€If€you€say€that€the€consumers€can€make€claimsÌthat€can€go€on€forever,€then€you€are€arguing€against€theÌwhole€concept€of€a€statute€of€limitations,€and€thisÌ60-day€limit€is€in€the€nature€of€a€statute€ofÌlimitations,€and€it€requires€the€carrier€to€accept€onlyÌnotices€which€have€been€properly€filed.Ì€€€€€€€€There€are€a€series€of€other€requirements€in€theÌregulation€with€respect€to€what€the€notice€must€say.€€ItÌmust€set€forth€the€billing€entity,€identify€theÌÐ	   	 ì,'2   Ðcustomer's€name,€telephone€number.€€If€any€of€thoseÌprovisions€were€omitted€from€the€notice,€the€notice€isÌsimilarly€inadequate,€and€the€carrier€cannot€act€upon€itÌand€charge€back.€€And€so€what€the€industry€is€saying€is,Ìyou€must€at€least€follow€these€threshold€rules,€and€thatÌwill€ameliorate€the€situation€greatly.€€If€you€choose€toÌact€at€a€later€time€on€properly€filed€60-day€notices,Ìthat's€fine,€but€at€least€abide€the€regulation.Ì€€€€€€€€MS.€HARRINGTON:€€Well,€I€think€at€least€onÌbehalf€of€the€staff€of€the€Commission€that€we€do€notÌagree€with€you€with€regard€to€what€you€just€stated€aboutÌthe€rule€and€what€is€required€versus€what€isÌdiscretionary.Ì€€€€€€€€MR.€GOLDBRENNER:€€Can€you€tell€me€what€theÌdifference€is€between€the€requirement€for€the€telephoneÌnumber€and€the€name€and€the€requirement€for€it€to€beÌfiled€within€60€days?€€How€do€those€two€differ€asÌrequirements?Ì€€€€€€€€MS.€HARRINGTON:€€I'm€telling€you€that€theÌrequirement€that€a€dispute€be€raised€within€60€days€goesÌto€the€consumers'€rights€to€be€free€from€billing€orÌdiscontinuance,€and€if€you€look€at€the€Fair€CreditÌBilling€Act€and€Regulation€Z,€which€is€what€this€isÌmodeled€from,€the€60-day€requirement€goes€to€theÌconsumer's€ability€to€be€free€from€further€collectionÌÐ	   	 ì,'2   Ðactivity€or€other€adverse€action.Ì€€€€€€€€MR.€GOLDBRENNER:€€You€mean€the€consumer€can't€beÌ--€can't€be€cut€off€within€that€60€days?Ì€€€€€€€€MS.€HARRINGTON:€€If€the€consumer€raises€theÌdispute€within€that€60-day€period,€then€the€consumer'sÌ--€then€no€adverse€action€may€be€taken€against€theÌconsumer€as€long€as€the€dispute€is€underÌre-investigation.€€If€the€re-investigation€establishesÌthat€it's€a€valid€charge€and€the€billing€entity€directsÌthe€--€informs€the€consumer€of€that,€then€the€consumerÌis€obligated€to€pay€the€charge,€in€the€same€way€that€aÌconsumer€raises€a€dispute€under€the€Fair€Credit€BillingÌAct€and€Regulation€Z.Ì€€€€€€€€So,€the€60€days€doesn't€--€there€is€not€aÌstatute€of€limitations€on€the€LEC's€discretion€here.ÌThe€statute€of€limitations,€if€you€will,€goes€to€certainÌrights€that€the€consumer€has€to€be€protected€fromÌcollection€activity€and€other€adverse€action€so€long€asÌthe€consumer€raises€the€dispute€within€the€60-dayÌperiod.Ì€€€€€€€€MR.€GOLDBRENNER:€€So€long€as€the€consumer€raisesÌthe€dispute€within€60€days,€he€is€protected€from€havingÌhis€phone€service€cut€off.€€Is€that€correct?Ì€€€€€€€€MS.€HARRINGTON:€€Well,€no,€the€consumer€isÌprotected€from€having€his€or€her€phone€serviceÌÐ	   	 ì,'2   Ðdisconnected€for€nonpayment€of€900€number€charges€in€aÌmuch€broader€way,€and€that€is€an€FCC€and€state€lawÌrequirement€and€so€on€and€so€forth.Ì€€€€€€€€MR.€GOLDBRENNER:€€But€I€still€don't€understand,Ìthen,€what€the€60-day€limit€is€for.€€Is€it€protectingÌthe€consumer€or€is€it€protecting€the€industry?Ì€€€€€€€€MS.€HARRINGTON:€€The€60-day€limit€providesÌcertain€basic€protections€to€the€consumer.Ì€€€€€€€€MR.€GOLDBRENNER:€€So,€the€--€in€order€--€so,€theÌconsumer€must€file€within€60€days€in€order€for€theÌconsumer€to€get€certain€protection?Ì€€€€€€€€MS.€HARRINGTON:€€That's€correct.Ì€€€€€€€€MR.€GOLDBRENNER:€€And€what€protection€is€heÌgetting€if€he€files€within€60€days?Ì€€€€€€€€MS.€HARRINGTON:€€If€the€consumer€raises€theÌdispute€within€60€days,€the€consumer€is€entitled€to€aÌre-investigation€of€the€charge€or€a€forgiveness€of€theÌcharge€if€there€is€no€re-investigation€undertaken,€andÌthe€consumer€further€is€entitled€to€remain€free€fromÌfurther€adverse€action€--Ì€€€€€€€€MR.€GOLDBRENNER:€€And€if€the€--Ì€€€€€€€€MS.€HARRINGTON:€€--€During€the€time€that€theÌcharge€is€subject€to€re-investigation.Ì€€€€€€€€MR.€GOLDBRENNER:€€And€what€penalty€does€theÌconsumer€suffer€if€he€doesn't€file€within€60€days?ÌÐ	   	 ì,'2   Ð€€€€€€€€MS.€HARRINGTON:€€The€consumer€is€not€entitled€toÌbe€free€from€adverse€action€if€the€claim€is€raisedÌoutside€of€the€60-day€period.€€So,€the€consumer€is€notÌentitled€to€be€free€from€further€billing€andÌcollection.Ì€€€€€€€€MR.€GOLDBRENNER:€€Well,€I€--€as€you€said€before,ÌI'm€afraid€we€must€disagree.€€I€think€that€sounds€veryÌmuch€like€a€limit€to€me€that€is€not€as€well€--Ì€€€€€€€€MS.€HARRINGTON:€€Well,€if€you€look€to€theÌstatement€of€basis€and€purpose€from€the€rulemakingÌrecord,€it€is€quite€clear,€Ron,€and€also€from€theÌlegislative€history€of€the€statute,€that€whatÌCongressman€Swift,€who€was€instrumental€in€putting€thisÌlanguage€in€the€bill,€intended,€and€if€you€look€throughÌthe€committee€hearing€transcripts€on€the€legislation,Ìwhat€was€clear€is€that€the€Congress€intended€that€theÌCommission€adopt€the€same€kinds€of€billing€disputeÌresolution€provisions€that€are€clearly€laid€out€in€theÌFair€Credit€Billing€Act€and€Regulation€Z.Ì€€€€€€€€MR.€GOLDBRENNER:€€Well,€if€that€were€the€case,Ìit€seems€to€me€that€the€words€don't€say€that,€becauseÌthe€section€--Ì€€€€€€€€MS.€HARRINGTON:€€Well,€it€says€it€right€in€theÌstatute.€€It€says€it€right€in€the€statute.Ì€€€€€€€€MR.€GOLDBRENNER:€€The€Section€B€regulationÌÐ	   	 ì,'2   Ðstates,€"A€customer€may€initiate€a€billing€review€withÌrespect€to€a€telephone-billed€purchase€by€providing€theÌbilling€entity€with€notice€of€the€billing€error€no€laterÌthan€60€days,"€so€that€it€would€seem€to€me€from€theÌplain€reading€of€this€that€if€he€provides€notice€laterÌthan€60€days,€he€may€not€initiate€a€billing€review.€€IÌdon't€see€how€you€could€read€the€words€any€other€way.Ì€€€€€€€€MS.€HARRINGTON:€€The€point€is€that€part€of€theÌrule€doesn't€govern€the€conduct€of€LECs.€€LECs€in€--€theÌonly€point€that€we're€making€here€is€that€LECs€can€doÌwhatever€LECs€want€to€do.Ì€€€€€€€€MR.€GOLDBRENNER:€€I'm€not€arguing€that,€but€whatÌI'm€saying€is€that€LEC€--€LECs€may€not€initiate€aÌbilling€review€if€they€get€a€notice€that€is€not€valid.ÌIf€a€notice€comes€in€--Ì€€€€€€€€MS.€HARRINGTON:€€Well,€we€are€going€to€move€on.Ì€€€€€€€€MR.€GOLDBRENNER:€€--€after€60€days,€it's€notÌvalid.Ì€€€€€€€€MS.€HARRINGTON:€€Ron,€that's€not€what€the€ruleÌsays.Ì€€€€€€€€Let's€see€here,€I€wanted€to€ask€about€this€dataÌbase€issue.Ì€€€€€€€€Gary,€do€you€have€something€on€that?Ì€€€€€€€€MR.€PASSON:€€Yes,€I€can€talk€to€that€for€aÌsecond.ÌÐ	   	 ì,'2   Ð€€€€€€€€I€think€probably€one€of€the€best€analogies€hereÌto€this€data€base€issue€would€be€that€which€is€beingÌdone€in€the€long€distance€area,€where€people€that€haveÌcontested€long€distance€and€not€paid€valid€long€distanceÌbills€have€been€put€into€a€data€base€that€I€believe€areÌbeing€shared€by€the€participating€major€EXEs.€€That€dataÌbase€must€be€driven€by€name,€not€by€telephone€number,Ìbecause€clearly€the€possibility€exists€for€that€personÌto€create€a€brand€new€person€by€creating€a€brand€newÌtelephone€number,€by€going€to€the€LEC€and€simplyÌrequesting€another€telephone€number.Ì€€€€€€€€So,€to€the€extent€that€there€was€a€data€baseÌthat€was€driven€by€the€names€of€the€consumers€that€hadÌaggregated€their€responsibilities€to€pay€their€billsÌafter€a€reasonable€investigation,€I€think€the€industryÌwould€be€very€interested€in€having€that.Ì€€€€€€€€MS.€HARRINGTON:€€Okay,€I€want€to€do€a€quickÌcheck€and€see€if€there€is€any€agreement€around€the€tableÌas€to€the€desirability€of€the€creation€of€that€kind€ofÌdata€base€and€the€accessibility€on€it.€€I€want€yes/nosÌonly€here.Ì€€€€€€€€Barbara,€is€that€something€that€Southern€NewÌEngland€Telephone€could€agree€to?Ì€€€€€€€€MS.€MAJESKI:€€I€think€so.Ì€€€€€€€€MS.€HARRINGTON:€€Yes€from€SNET.€€Dave,€Jill?ÌÐ	   	 ì,'2   Ð€€€€€€€€MS.€SANDFORD:€€I€don't€think€we€will€take€aÌposition€on€this.Ì€€€€€€€€MS.€HARRINGTON:€€No€position€from€NAAG.Ì€€€€€€€€Susan?Ì€€€€€€€€MS.€GRANT:€€No.Ì€€€€€€€€MS.€HARRINGTON:€€No,€you€wouldn't€agree?Ì€€€€€€€€Alan?Ì€€€€€€€€MR.€TAYLOR:€€Well,€you€are€--€you€are€asking€meÌyes/no,€but€I€think€they€are€talking€about€establishingÌthe€data€base€themselves,€not€the€LECs,€if€I€understandÌcorrectly€--Ì€€€€€€€€MS.€HARRINGTON:€€But€I€am€looking€for€--€we€areÌlooking€for€possible€solutions€here€and€checking€to€seeÌwhether€there€is€agreement€among€the€participants.Ì€€€€€€€€MR.€TAYLOR:€€Well,€I€want€to€support€the€dataÌbase,€but€I€would€hope€that€the€industry€would€also€makeÌavailable€on€that€data€base€the€opportunity€forÌsubscribers€to€say€I€don't€want€access€to€informationÌservices.Ì€€€€€€€€MS.€HARRINGTON:€€So,€opt€out,€consumers€wouldÌhave€the€ability€to€opt€out.Ì€€€€€€€€MR.€TAYLOR:€€Right.Ì€€€€€€€€MS.€HARRINGTON:€€Susan,€would€that€change€yourÌview?Ì€€€€€€€€MS.€GRANT:€€Yeah.ÌÐ	   	 ì,'2   Ð€€€€€€€€MS.€HARRINGTON:€€All€right,€if€consumers€have€anÌability€to€opt€out,€so€far€everyone€who€has€taken€aÌposition€would€find€that€to€be€an€acceptable€solution.Ì€€€€€€€€Joel,€do€you€have€a€position€on€that?Ì€€€€€€€€MR.€DICHTER:€€The€answer€is€yes.Ì€€€€€€€€MS.€HARRINGTON:€€Yes,€fine.Ì€€€€€€€€Peter?Ì€€€€€€€€MR.€PASSON:€€Absolutely.Ì€€€€€€€€MS.€HARRINGTON:€€Does€anyone€wish€to€say€no?Ì€€€€€€€€MS.€WILLIAMS:€€I€don't€know€that€I€want€to€sayÌno,€I€just€want€to€qualify€that€I€think€we€would€have€toÌfind€out€from€a€state€regulatory€perspective,€can€weÌhave€a€bad€debtor€data€base.€€If€we€can€and€if€it€can€beÌaccessed€by€anybody€--€you€know,€I€think€there€have€toÌbe€certain€rules€of€who€could€get€to€it€and€whoÌcouldn't.€€I€don't€know€that€I'm€qualified€to€say€yes.ÌIt€sounds€good,€but€I€can't€say€yes€unequivocally.Ì€€€€€€€€MS.€HARRINGTON:€€Jon?Ì€€€€€€€€MR.€SHAUB:€€Qualified€yes.Ì€€€€€€€€MS.€HARRINGTON:€€Qualified€yes.Ì€€€€€€€€Albe?Ì€€€€€€€€MR.€ANGEL:€€Yes.Ì€€€€€€€€MS.€HARRINGTON:€€Ron?Ì€€€€€€€€MR.€GOLDBRENNER:€€Yes,€but€with€theÌqualification€that€I€think€you€could€design€your€dataÌÐ	   	 ì,'2   Ðbase€so€that€it€was€not€indicting€of€a€person€in€thatÌthe€data€that€was€contained€in€there€would€record€eventsÌthat€happened.€€There€were€so€many€claims€filed€or€theÌfacts€of€certain€accounts,€transactions,€and€peopleÌcould€draw€their€own€conclusions€from€that€in€credit€andÌin€many€other€things.Ì€€€€€€€€Companies€act€differently€with€respect€toÌproblems€they€have€with€debtors.€€They€have€differentÌcredit€limits.€€If€somebody€defaults€once,€twice,€fiveÌtimes,€ten€times,€they€all€have€different€levels€of€whatÌthey€deem€to€be€a€problem.€€So,€a€data€base€should€notÌmake€any€judgments;€it€should€merely€set€forth€theÌfacts.€€If€it€sets€forth€the€facts,€then€there€shouldn'tÌbe€any€problem.Ì€€€€€€€€MS.€HARRINGTON:€€Okay,€a€nonjudgmental€data€baseÌwith€an€opt-out€for€consumers,€okay.Ì€€€€€€€€Gary?Ì€€€€€€€€MR.€PASSON:€€I€just€want€to€make€one€quickÌcomment€from€earlier€about€IP€names€and€addresses.Ì€€€€€€€€MS.€HARRINGTON:€€Yes.Ì€€€€€€€€MR.€PASSON:€€And€I€want€to€draw€a€parallel€toÌthe€credit€card€system.€€We€are€a€very€large€credit€cardÌplayer€and€a€very€large€telephone€player.€€We€place€ourÌown€800€number€on€each€of€the€credit€card€transactionsÌthat€we€perform,€and€in€an€average€day,€for€75€percentÌÐ	   	 ì,'2   Ðof€all€inquiry,€is€37€days.€€So,€we€actually€have€anÌextremely€timely€ability€to€get€information€fromÌconsumers€who€have€a€question€about€was€this€transactionÌvalid,€was€it€really€made€by€somebody€authorizing,€youÌknow,€using€that€specific€person's€credit€card.Ì€€€€€€€€I€suspect€we€would€find€a€parallel€in€thatÌteleco€business€if€that€information€was€made€availableÌto€players€who€had€access€to€all€of€the€information,Ìunlike€the€LEC,€who€is€really€working€with€a€very€narrowÌpiece€of€information.€€What€they€are€really€working€withÌis€the€number€it€was€called€from,€the€number€it€wasÌcalled€to€and€a€date€and€time€and€an€amount,€but€theyÌreally€have€limited€information€about€more€about€theÌcall€or€possibly,€in€our€particular€case,€we€happen€toÌhave€the€voice€prints€and€those€kinds€of€things.€€So,€IÌwould€--€I€think€we€would€also€have€the€industryÌextremely€interested€in€having€that€be€something€thatÌwas€made€available.Ì€€€€€€€€MS.€HARRINGTON:€€Marianne?Ì€€€€€€€€MS.€SCHWANKE:€€If€there€was€such€an€industrywideÌdata€base€developed,€what€criteria€would€be€used€toÌdetermine€whether€or€not€to€put€a€consumer€into€the€dataÌbase€and€who€would€make€that€decision?Ì€€€€€€€€MS.€HARRINGTON:€€Albe?Ì€€€€€€€€MR.€ANGEL:€€I€think€the€exact€mechanics€for€whatÌÐ	   	 ì,'2   Ðthe€data€base€reports€on€a€factual€basis€is€yet€to€beÌdetermined.€€I€think€that€would€be€a€function€of€whatÌthe€industry€can€do€together,€but€from€the€standpoint€ofÌwhat€the€consumer's€privacy€concerns€are,€the€ISAs€haveÌbeen€active€in€privacy€proceedings€that€the€FTC€has€beenÌspearheading,€and€we€have€learned€from€that€experience,Ìso€we€would€be€prepared€to€address€notification€andÌaccess€use,€security,€expiration,€procedures€forÌcorrecting€inaccuracies.Ì€€€€€€€€MS.€HARRINGTON:€€It€could€be€--€I€would€justÌobserve€in€a€nonauthoritative€sort€of€way€that€thatÌcould€be€a€very€interesting€model€for€a€self-regulatoryÌsolution€to€a€problem€before€it€even€exists.Ì€€€€€€€€MR.€ANGEL:€€I€would€just€add€to€that,€to€theÌextent€that€you€have€a€problem€now€in€telephone,€justÌwait€until€the€Internet€gets€kicking.€€Time€is€of€theÌessence.Ì€€€€€€€€MS.€HARRINGTON:€€There€is€a€news€flash.Ì€€€€€€€€We€are€at€the€point€where€we€are€supposed€toÌhave€public€participation,€and€I€want€to€do€that,€andÌthen€we€may€run€a€little€over€and€hear€some€moreÌcomments,€but€I€know€we€had€one€public€person€back€thereÌwho€wants€to€participate,€and€could€you€--€hold€on€aÌminute,€we€have€our€own€open€practice€figure€coming€atÌyou€with€a€microphone.€€Allen?ÌÐ	   	 ì,'2   Ð€€€€€€€€MR.€HILE:€€Yes,€yes,€it€works.€€Who€is€it€thatÌwants€to€participate?Ì€€€€€€€€MS.€HARRINGTON:€€Tell€us€who€you€are,€please.Ì€€€€€€€€MR.€LOADER:€€My€name€is€Nick€Loader.€€I€am€withÌa€company€called€Loader€Communications.€€I€appreciate€aÌfew€minutes€here.Ì€€€€€€€€I€just€want€to€discuss€a€few€items€that€I€sawÌglazed€over€in€your€discussions€here.€€Our€companyÌprovides€services€for€international€carriers.€€WeÌoperate€in€about€seven€different€countries,€terminatingÌlocal€services€as€well€as€international,€some€of€whichÌreceive€calls€from€the€United€States.€€I€want€to€makeÌaware€that€every€carrier€that€we€work€with€subscribesÌwherever€technically€feasible€to€the€TDDRA€rules€andÌregulations€on€a€voluntary€basis,€okay?Ì€€€€€€€€There€are€some€things€that€technically€cannot€beÌdone€according€to€TDDRA,€but€there€is€carriers€out€thereÌthat€are€doing€it€properly.€€There€are€a€few€that€stillÌneed€to€be€talked€to€as€opposed€to€try€and€regulate.€€IÌthink€a€word€from€the€FTC€about€what€should€be€beingÌdone€would€serve€to€bring€them€on€line€to€operate€in€aÌproper€method€or€fashion.Ì€€€€€€€€The€carrier€agreements€that€we€have€to€sign,€IÌbelieve€the€Commission€has€been€furnished€with€a€copy€ofÌthe€code€of€conduct€of€the€ITA€and€the€NIS.€€They€areÌÐ	   	 ì,'2   Ðnow€inherently€a€part€of€any€and€all€carrier€agreementsÌthat€we€sign.Ì€€€€€€€€Additionally,€there€was€some€mention€here€aboutÌpreambles€and€they€may€not€necessarily€be€all€thatÌeffective,€but€I'm€an€old€body€in€this€business,€been€inÌit€about€13€years,€and€I€remember€when€preambles€wereÌoffered€on€a€local€market€basis€in€the€976€industry.ÌDepending€on€the€total€price€cap,€those€preamblesÌreduced€the€number€of€public€complaints€by€30€to€70Ìpercent.€€So,€I€think€we€should€give€a€lot€of€credit€toÌjust€that€simple€step€alone€in€helping€reduce€aÌtremendous€amount€of€public€complaints.Ì€€€€€€€€MS.€HARRINGTON:€€Do€your€international€carriersÌrequire€information€services€to€put€preambles€on€theirÌnumbers?Ì€€€€€€€€MR.€LOADER:€€We€have€preambles€on€every€one€ofÌour€services.Ì€€€€€€€€MS.€HARRINGTON:€€And€do€your€internationalÌcarriers€include€carriers€in€Muldova?Ì€€€€€€€€MR.€LOADER:€€We€do€not€go€to€Muldova.Ì€€€€€€€€MS.€HARRINGTON:€€How€about€Guyana?Ì€€€€€€€€MR.€LOADER:€€We€do€not€deal€directly€withÌGuyana.Ì€€€€€€€€MS.€HARRINGTON:€€Dominican€Republic?Ì€€€€€€€€MR.€LOADER:€€We€do,€and€they€require€preamblesÌÐ	   	 ì,'2   Ðon€all€messages.Ì€€€€€€€€MS.€HARRINGTON:€€Sao€Tome?Ì€€€€€€€€MR.€LOADER:€€We€do€not.€€As€I€say,€a€fewÌcarriers€need€to€be€brought€on€board,€but€a€few€wordsÌfrom€the€appropriate€authorities€would€ensure€that€weÌare€all€playing€the€same€game.€€Additionally,€there€areÌno€real€high€premiums€for€these€calls.€€Our€average€callÌcosts€less€than€a€dollar€to€the€consumer,€and€because€ofÌthe€increase€in€international€traffic€overall,€I'm€sureÌthe€Commission€is€aware,€it€is€passing€down€a€consumerÌbenefit€that€all€international€rates€are€coming€down€andÌcoming€down€very€rapidly.Ì€€€€€€€€MS.€HARRINGTON:€€Are€you€going€to€be€hereÌtomorrow?Ì€€€€€€€€MR.€LOADER:€€Yes,€I€am.Ì€€€€€€€€MS.€HARRINGTON:€€Tomorrow,€because€we€think€theÌquality€of€everyone's€participation€today€has€beenÌexcellent,€and€we€are€hoping€we€haven't€burned€you€out,Ìbecause€tomorrow,€as€far€as€we're€concerned,€we€come€toÌa€very€hard€issue,€and€that€is€what€to€do€about€theÌdefinition€of€pay-per-call€services,€and€I'mÌparticularly€interested€in€what€you're€saying€now€as€itÌrelates€to€that€discussion.Ì€€€€€€€€MR.€LOADER:€€And€in€closing€I€just€want€to€sayÌthat€the€industry€as€a€whole,€900,€international,€is€notÌÐ	   	 ì,'2   Ðunsensitive€to€the€little€lady€that€gets,€you€know,Ìstuck€with€a€large€phone€call€because€somebody€clippedÌonto€her€phone€or€children,€latch€key€kids€typicallyÌthat€rack€up€a€massive€phone€bill.€€What€you€have€toÌremember€is€there€are€over€a€hundred€million€of€theseÌtransactions€done€per€annum.€€I€think€overall€theÌCommission,€the€various€policing€agencies€and€theÌassociations€we€have€in€place€now€are€doing€a€prettyÌgood€job€of€keeping€most€of€those€complaints€to€aÌminimum.Ì€€€€€€€€MS.€HARRINGTON:€€Thank€you€very€much,€thank€youÌforÌyour€patience€and€participation€during€the€day.Ì€€€€€€€€We€are€going€to€run€for€another€five€minutes€andÌthen€we€are€going€to€let€you€all€go€to€your€corners€forÌthe€evening.Ì€€€€€€€€Mark€has€a€question.Ì€€€€€€€€MR.€HERTZENDORF:€€Yes,€earlier€we€talked€aboutÌthe€LECs€passing€on€the€900€number€blocking€informationÌon€something€called€LIDB,€which€I€think€I€forgot€what€itÌwas€already,€but€I€was€wondering€if€we€could€talk€aboutÌthe€relationship€between€doing€something€like€that€andÌthis€industrywide€data€base.€€Is€one€approach€strictlyÌpreferred€by€the€IPs€and€what€are€the€costs€and€benefitsÌof€doing€either€one,€and€is€it€an€either/or€situation€orÌÐ	   	 ì,'2   Ðdo€the€IPs€actually€want€both€somehow€implemented?Ì€€€€€€€€MS.€HARRINGTON:€€Gary?Ì€€€€€€€€MR.€PASSON:€€They€somewhat€speak€to€twoÌdifferent€issues.€€The€LIDB€data€base€discussionÌassociated€with€bringing€the€900€--€the€900€blockingÌinformation€into€LIDB€--€let€me€just€back€up€a€halfÌsecond€and€put€this€in€some€context.Ì€€€€€€€€LIDB€is€line€item€data€base.€€Basically,€majorÌplayers€can€connect€into€a€network€that's€provided€by€aÌcouple€different€players,€and€they€can€send€a€messageÌinto€that€network,€along€with€a€telephone€number,€andÌreceive€back€from€the€network€a€number€of€pieces€ofÌinformation€about€that€telephone€number,€whether€or€notÌit€accepts€a€collect€call,€whether€it€will€takeÌthird-party€billing,€whether€or€not€it's€a€hotel,Ìwhether€or€not€it's€a€prison,€a€number€of€pieces€ofÌinformation.€€There€is€a€lot€of€available€space€in€thatÌmessage.Ì€€€€€€€€One€of€the€pieces€of€information€that's€notÌavailable€in€that€is€whether€or€not€that€specificÌtelephone€number€has€900€blocking.Ì€€€€€€€€MS.€HARRINGTON:€€Does€LIDB€--€but€could€that€beÌmade€available€in€LIDB?Ì€€€€€€€€MR.€PASSON:€€LIDB€is€made€available€toÌeverybody.ÌÐ	   	 ì,'2   Ð€€€€€€€€MS.€HARRINGTON:€€No,€could€the€900€numberÌblocking€information€become€part€of€LIDB?€€Is€there€aÌtechnological€reason€why€--Ì€€€€€€€€MR.€PASSON:€€No,€I€don't€believe€so.Ì€€€€€€€€MS.€HARRINGTON:€€It€is€just€not€there.Ì€€€€€€€€MR.€PASSON:€€It€is€not€there,€and€obviouslyÌthere€is€some€amount€of€programming,€and€obviously€youÌhave€got€the€900€data€base€over€here€and€LIDB€overÌthere,€so€you€have€to€get€them€to€talk€to€each€other,Ìbut€it's€not€--€it's€just€information,€and€I€suspectÌthat€if€it€was€deemed€important€enough,€it€could€be€madeÌavailable€in€a€reasonable€period€of€time.€€So,€LIDBÌreally€addresses€whether€a€certain€telephone€numberÌwants€to€receive€certain€services,€and€I€think€we€canÌdefine€information€services€so€we€don't€have€to€dealÌwith€the€issue€of€900€blocking€or€not.Ì€€€€€€€€The€question€is€do€you€want€information€servicesÌor€enhanced€services€or€any€other€term€that€we€couldÌcome€up€with,€and€that€could€be€a€characteristic€of€aÌtelephone€number.Ì€€€€€€€€MS.€HARRINGTON:€€So,€consumers€could€have€theirÌtelephone€--€certain€of€their€preferences€with€regard€toÌuse€of€telephone€services€included€in€LIDB.Ì€€€€€€€€MR.€PASSON:€€And,€in€fact,€they€do€today.Ì€€€€€€€€MS.€WILLIAMS:€€It€is€there€now.ÌÐ	   	 ì,'2   Ð€€€€€€€€MS.€HARRINGTON:€€But€it€could€be€a€richer€sourceÌof€information.Ì€€€€€€€€MS.€WILLIAMS:€€Earlier€I€had€said€it€was€onlyÌreally€designed€for€operator-assisted€calls€only,€andÌthat's€really€who€handles€it€today,€operator€servicesÌpeople,€but€they€are€working€towards€this€get-dataÌrequest€that€will€tell€you€more€about€an€account.€€It€isÌjust€not€in€place€yet.€€They€are€working€on€it€piece€byÌpiece,€and€some€information€is€there€and€some€isn't.Ì€€€€€€€€Frankly€I€left€for€a€year€to€have€a€baby€andÌnever€--€wasn't€around€to€keep€pushing€at€the€time€toÌsay€900€needs€to€be€there.€€I€don't€think€it's€a€badÌplace€for€it€to€be,€but€the€LECs€--€it's€a€BellcoreÌproduct€that€we're€paying€for,€somebody€has€to€agree€toÌfunding.€€It's€a€big€deal€in€that€respect€I€think€forÌsome€LECs€to€get€information€out€there.Ì€€€€€€€€MS.€HARRINGTON:€€It€sounds€as€though€LIDB€couldÌbe€a€very€empowering€thing€for€consumers.Ì€€€€€€€€MS.€WILLIAMS:€€Right,€right,€and€again,€it€wouldÌjust€be€the€900€restriction.€€So,€I€guess€those€servicesÌthat€are€not€offered€on€900,€we're€making€the€leap€hereÌthat€those€same€customers€don't€want€to€reach€otherÌservices,€and€I€don't€think€it's€a€bad€leap.Ì€€€€€€€€MS.€HARRINGTON:€€Would€the€LECs€and€others€--Ìwhat€would€the€LECs€and€others€think€about€giving€theirÌÐ	   	 ì,'2   Ðcustomers€sort€of€a€preference€choice€form€so€that€youÌcould€know€whether€a€consumer's€choice€of€900€numberÌblocking€means€that€they€also€don't€want€X,€Y€or€Z?Ì€€€€€€€€MS.€WILLIAMS:€€From€a€network€perspective,€I'mÌnot€sure€how€easy€that€is€to€do.€€I€know€when€you€have€aÌcertain€type€of€block,€and€I'm€getting€way€out€of€myÌarea€here,€but€you're€taking€up€certain€things€in€theÌnetwork€and€line€class€codes,€and€then€for€eachÌdifferent€type€of€blocking€you€have,€you're€taking€upÌeven€more€network€space.€€I€think€that's€difficult.Ì€€€€€€€€I€mean,€I€think€it€would€be€a€better€assumptionÌto€just€say€if€you€have€900€blocking,€you€probably€don'tÌwant€access€to€those€same€kinds€of€services€that€areÌprovided€now€over€in€other€dialing€patterns.€€Again,Ìit's€an€issue€of€getting€all€the€LECs€to€put€the€dataÌout€there€and€spending€the€money€to€do€it.Ì€€€€€€€€MS.€HARRINGTON:€€Jon?Ì€€€€€€€€MR.€SHAUB:€€Let€me€just€ask€before€we€go€toÌanother€agenda€tomorrow,€I€indicated€AT&T's€support€forÌan€industry€data€base€with€a€qualifier,€and€I€wouldÌappreciate€it€for€the€record€to€state€what€thoseÌqualifiers€are.€€Can€I€have€my€second€here?Ì€€€€€€€€MS.€HARRINGTON:€€Yes.Ì€€€€€€€€MR.€BREE:€€My€name€is€Dermott€Bree,€I'm€anÌattorney€with€AT&T,€I€support€AT&T€Multiquest.€€As€JonÌÐ	   	 ì,'2   Ðsaid,€in€principle,€we're€not€opposed€to€a€data€base€ofÌconsumers€who€have€refused€to€pay€legitimate€900Ìcharges,€not€in€principle€certainly.€€We€alreadyÌparticipate,€AT&T€already€participates€in€somethingÌcalled€the€National€Telecommunications€Data€Exchange,Ìwhich€is€a€data€base€which€reports€on€business€customersÌwho€failed€to€pay€undisputed€legitimate€charges€on€theirÌtelephone€bills,€and€we're€currently€working€on€theÌNational€Consumer€Telecommunications€Data€Exchange,Ìwhich€similarly€reports€on€consumers€who€have€failed€orÌrefused€to€pay€on€disputed€legitimate€charges.Ì€€€€€€€€With€respect€to€a€900€data€base,€we€would€not€beÌopposed€to€that€either,€but€we€would€want€to€know€andÌstudy€exactly€what€goes€into€the€data€base.€€There€areÌissues,€not€the€least€of€which€are€state€law€issues,Ìlike€libel€and€slander,€because€although€it's€factualÌinformation€in€there,€it€is€possible€that€pejorativeÌinferences€could€be€taken€from€that€factualÌinformation.€€We€want€it€known,€sure,€that€AT&T€and€anyÌparticipating€entity€were€protected€from€that€byÌavoiding€having€consumers€be€injured€by€having€theirÌnames€or€information€about€them€in€this€data€base.Ì€€€€€€€€In€addition,€there€may€be€fair€credit€reportingÌissues€involving€such€a€data€base,€and€they€would€haveÌto€be€examined,€as€well,€but€those€are€just€theÌÐ	   	 ì,'2   Ðqualifications.€€Let€me€just€say€that€we€are€not€opposedÌto€this€data€base,€but€we€want€to€know€and€study€exactlyÌwhat€--€how€it's€structured€and€what€information€goesÌinto€it€and€how€it's€administered.Ì€€€€€€€€MS.€HARRINGTON:€€Thank€you.Ì€€€€€€€€We€are€going€to€hear€from€Peter,€Alan,€Gary,ÌAlbe,€Susan,€and€then€we're€done€for€the€day.Ì€€€€€€€€MR.€BRENNAN:€€Just€quickly,€a€couple€of€mop-upÌissues.€€I€would€like€to€remind€the€panel€thatÌhistorically,€the€last€time€we€were€around€this€tableÌfor€this€purpose,€the€determination€--€that's€when€theÌdeterminations€were€made€as€a€result€of€congressionalÌintent€that€it€would€be€carriers€who€would€be€listed€onÌthe€phone€bills€rather€than€information€providers,€andÌthe€reason€was,€and€it€seems€to€have€played€out,€is€thatÌthey€are€more€accessible,€they€are€more€able€to€beÌreached,€and€they€have€the€billing€data€available.Ì€€€€€€€€I'll€also,€a€remark€that€was€made€down€at€theÌother€end€of€the€table€about€a€lack€of€trust€between€IPsÌand€LECs,€and€I€would€amplify€that€by€saying€that€inÌthis€new€competitive€telecommunications€environment,Ìinformation€providers€compete€with€LECs,€frankly,€and€weÌwill€be€competing€with€our€carriers€as€they€begin€toÌoffer€communications€services,€as€well,€so,€I€would€askÌjust€sensitivity€to€that€issue,€because€we€have€someoneÌÐ	   	 ì,'2   Ðstep€through€the€looking€glass€vis-a-vis€those€issues,Ìand€those€are€of€great€importance€to€those€of€us€whoÌconsider€them€in€the€competitive€environment.€€So,€withÌthat€I'll€close.€€Thank€you.Ì€€€€€€€€MS.€HARRINGTON:€€Thank€you.Ì€€€€€€€€Alan?Ì€€€€€€€€MR.€TAYLOR:€€Thanks.Ì€€€€€€€€In€closing,€I€just€want€to€point€out€how€closeÌthe€industry€--€well,€first€of€all,€let€me€say€I'm€notÌtoo€much€concerned€about€the€data€base€that€contains€theÌnames€of€the€folks€who€don't€pay€and€so€forth,€but€I'mÌdelighted€that€some€of€the€focus€has€at€least€come€toÌthe€data€base€being€used€for€an€opt-out€position.ÌThat's€very€close€to€what€we've€proposed€in€ourÌcomments.€€I€invite€you€to€read€it.Ì€€€€€€€€As€long€as€consumers,€whether€it's€through€LIDBÌor€whether€it's€through€some€other€data€base,€as€long€asÌI€can€tell€consumers€that€if€they€want€no€more€of€theseÌcalls,€it€would€be€very€great€that€they€would€be€able€toÌgo€to€a€data€base€--€it€would€be€wonderful€if€the€LECsÌwould€voluntarily€do€that,€if€the€industry€would€doÌthat.Ì€€€€€€€€Thank€you.Ì€€€€€€€€MS.€HARRINGTON:€€Thank€you,€Alan.Ì€€€€€€€€Gary?ÌÐ	   	 ì,'2   Ð€€€€€€€€MR.€PASSON:€€I€will€make€just€one€last€closingÌpoint,€and€that€is€that€we€have€now€authorized€theÌconcept€of€CLECs,€competitive€LECs,€which€are€going€toÌprovide€telephone€service€in€the€physical€locations€thatÌthe€current€LECs€have.€€Without€this€kind€of€informationÌbeing€made€available,€it€really€opens€up€an€incredibleÌopportunity€for€abuse€really€on€both€sides,€and€I€thinkÌby€having€some€kind€of€data€base€with€properÌprotections,€with€proper€thought€and€processes€put€intoÌthis,€I€think€we€can€stem€a€very€significant€problemÌthat€might€have€us€back€here€in€a€couple€years€trying€toÌfigure€out€what€to€do€about€it.Ì€€€€€€€€MS.€HARRINGTON:€€Albe?Ì€€€€€€€€MR.€ANGEL:€€I€just€want€to€articulate€a€proposedÌsolution€that€may€not€have€made€it€into€the€ISA€commentsÌbut€was€discussed€last€night€as€we€prepared€for€thisÌmeeting,€and€that€has€to€do€with€the€timeliness€ofÌinformation€input€into€the€data€base.€€Assuming€we€canÌget€together€as€an€industry€and€define€what€informationÌis€in€there,€how€it's€routinely€maintained€and€updatedÌand€clarified,€we€would€then€be€in€a€position€to€haveÌdirect€inputs€of€information€into€that€data€base.Ì€€€€€€€€So,€apart€from€the€access€question,€whether€orÌnot€a€person€can€dial€and€get€through€the€network,€thereÌwill€be€an€independent€inquiry€into€the€data€base€toÌÐ	   	 ì,'2   Ðdetermine€whether€or€not€billing€can€be€made€to€aÌparticular€number€and€whether€or€not€service€extended€toÌa€particular€number,€and€as€has€been€proposed€earlier,Ìif€there€is€an€ambiguous€situation,€there€is€always€theÌopportunity€to€connect€the€proposed€caller€to€a€customerÌservice€person€to€clarify€any€issue€that€might€exist.Ì€€€€€€€€But€if€we€were€to€construct€the€data€base,€weÌcould€shorten€the€time€very€significantly€by€havingÌlocal€exchange€carriers,€billing€entities,€interexchangeÌcarriers,€report€right€into€that€data€base,€and€thenÌpeople€who€were€relying€on€that€data€base€accessing€theÌinformation€instantaneously.€€So,€for€example,€if€anÌaccount€has€gone€bad€and€it's€known€on€day€23€in€aÌcycle,€on€day€24,€another€call€will€not€be€made€andÌcharged€to€that€line,€because€on€day€23,€at€the€end€ofÌthe€day,€the€data€base€has€been€updated,€and€we€don'tÌhave€to€wait€the€60,€90,€180€days€and€have€all€thoseÌcharges€in€the€interim.Ì€€€€€€€€MS.€HARRINGTON:€€Susan?Ì€€€€€€€€MS.€GRANT:€€I'm€confused€about€whether€we'reÌtalking€about€one€data€base€or€two.€€I€thought€that€oneÌof€the€data€bases€that€we€were€talking€about€was€the€oneÌthat€was€originally€alluded€to€this€morning€where€theÌindustry€was€looking€for€information€from€the€LECs€aboutÌconsumers€who€had€blocks€for€900,€who€didn't€want€to€getÌÐ	   	 ì,'2   Ð900€number€calls,€and€that€was€the€data€base€that€IÌthought€some€of€us€were€suggesting€could€incorporateÌother€consumer€preferences.Ì€€€€€€€€MS.€WILLIAMS:€€That's€LIDB.Ì€€€€€€€€MS.€HARRINGTON:€€That's€LIDB.Ì€€€€€€€€MS.€GRANT:€€The€other€data€base€--€and€I€hope€weÌare€talking€about€two€separate€ones€here,€because€IÌdon't€think€it's€appropriate€to€merge€them€--€is€aÌdeadbeat€data€base,€for€lack€of€a€better€description,Ìand€that's€one€that€if€such€a€thing€was€to€be€createdÌwould€have€to€be€modeled€after€fair€credit€reportingÌprotections€and€take€a€lot€of€thought€and€care€about€howÌto€do€it.€€So,€I€just€wanted€to€clarify€that€we€wereÌtalking€about€two€different€data€bases€and€not€one.Ì€€€€€€€€MS.€HARRINGTON:€€Although€I€think€what€we€haveÌheard€is€that€at€least€in€terms€of€toll€calling,€such€aÌdata€base€already€exists.€€Consumers€who€don't€pay€tollÌcalls€go€into€the€toll€--Ì€€€€€€€€MR.€PASSON:€€Both€data€bases.Ì€€€€€€€€MS.€HARRINGTON:€€Both€of€them€exist€already?Ì€€€€€€€€MR.€PASSON:€€LIDB€is€the€one€for€local€tollÌcalls,€and€then€--Ì€€€€€€€€MS.€HARRINGTON:€€But€there€is€also€some€sort€ofÌindustry€data€base€for€people€who€have€a€history€of€notÌpaying€phone€bills.€€It€does€already€exist.ÌÐ	   	 ì,'2   Ð€€€€€€€€MS.€GRANT:€€Maybe€it€just€isn't€as€well€knownÌyet,€because€those€disputes€are€not€as€numerous€asÌpay-per-call€disputes.Ì€€€€€€€€MS.€HARRINGTON:€€I€am€sure€we€can€talk€aboutÌthis€more,€and€we€can€take€a€little€bit€of€time€in€theÌmorning€if€you€all€want€to€think€about€some€of€theseÌissues€overnight€to€have€a€little€bit€of€discussion€inÌthe€morning,€but€we€are€now€at€the€ending€point.€€IÌthink€you€should€all€give€yourselves€a€tremendous€roundÌof€applause,€nobody€fell€asleep,€and€you€have€all€stayedÌvery€engaged,€and€we€look€forward€to€seeing€you€backÌhere€at€9:00€in€the€morning,€and€we€will€have€more€ofÌthis€wonderful€"make-hair-grow-on-your-chest"€coffee,Ìand€we€will€see€you€then.€€Thank€you.Ì€€€€€€€€òò(Whereupon,€at€5:08€p.m.,€the€conference€wasÐ   	 ¼à   Ðadjourned.)Ìóó€€€€€€€€€€€€€€€-€€€€-€€€€-€€€€-€€€€-Ð   	 Ü     ÐÐ	   	 l "   ÐÖ  €   è   ÖÖ €   è  Öòò€€€€€€C€E€R€T€I€F€I€C€A€T€I€O€N€€€O€F€€€R€E€P€O€R€T€E€RÐ   	 Ü      Ðóó€Ð   	 l   ÐDOCKET/FILE€NUMBER:€òòR611016Ð   	 ü    ÐóóCASE€TITLE:€€òòPAY-PER-CALL€RULEMAKINGÐ   	 Œ
°   ÐóóMEETING€DATE:€€òòJUNE€19,€1997Ð   	 @   Ðóó€Ð   	 ¬Ð
   Ð€€€€€€€€I€HEREBY€CERTIFY€that€the€transcript€containedÌherein€is€a€full€and€accurate€transcript€of€the€notesÌtaken€by€me€at€the€hearing€on€the€above€cause€before€theÌFEDERAL€TRADE€COMMISSION€to€the€best€of€my€knowledge€andÌbelief.Ì€Ì€€€€€€€€€€€€€€€€€€€€€€€€€DATED:€€6/26/97Ì€Ì€€€€€€€€€€€€€€€€€€€€€€€€€òò€€€€€€€€€€€€€€€€€€€€€€€€€€€€Ð   	 ¼à   Ðóó€€€€€€€€€€€€€€€€€€€€€€€€€SUSANNE€Q.€TATEÐ   	 Lp   Ð€ÌòòC€E€R€T€I€F€I€C€A€T€I€O€N€€€O€F€€€P€R€O€O€F€R€E€A€D€E€RÐ   	 l "   Ðóó€Ð   	 ü! $   Ð€€€€€€€€I€HEREBY€CERTIFY€that€I€proofread€the€transcriptÌfor€accuracy€in€spelling,€hyphenation,€punctuation€andÌformat.Ì€Ì€€€€€€€€€€€€€€€€€€€€òò€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€Ð   	 Ì)ð#.   Ðóó€€€€€€€€€€€€€€€€€€€€€€€€€DIANE€QUADEÐ   	 \+€%0   Ð