Copyright 2000 eMediaMillWorks, Inc.
(f/k/a Federal
Document Clearing House, Inc.)
Federal Document Clearing House
Congressional Testimony
March 9, 2000, Thursday
SECTION: CAPITOL HILL HEARING TESTIMONY
LENGTH: 1947 words
HEADLINE:
TESTIMONY March 09, 2000 KEVIN BREEN VICE PRESIDENT CONSUMER OPERATIONS AND
BILLING AT&T CONSUMER OPERATIONS AND BILLING AT&TCONSUMER OPERATIONS AND
BILLING AT&T HOUSE COMMERCE telecommunications, trade and
consumer protection ITEMIZED PHONE BILLS
BODY:
Prepared Statement of Mr. Kevin Breen Vice President, Consumer Operations
and Billing AT&T March 9, 2000 Thank you for the opportunity to speak about
customer billing and customer care operations. AT&T strongly supports the
principle that consumers are entitled to receive accurate billing information
from carriers about the communications services they offer. After all, the
ability of consumers to make informed purchasing decisions is the foundation of
a competitive marketplace. Because consumers depend on such information,
AT&T goes to great lengths - and incurs significant expense - to provide
clear information to customers and also to respond promptly and accurately to
customer inquiries. We believe that AT&T's billing practices consistently
meet, or exceed, common industry standards. In a nutshell, AT&T's policy is
to provide every reasonable assurance that its customers can determine (1) if
the AT&T services listed on their bills are the ones they have requested,
and (2) if the charges for those services are consistent with their service
arrangement. This policy, which AT&T takes very seriously, is not merely
consistent with sound legal principles. It also makes good business sense. Good
billing practices are essential to create consumer trust and loyalty, both of
which are critical to maintaining AT&T's reputation and brand name. At the
same time, providing consumers with clear information helps to avoid the costs
required to handle individual customer inquiries and complaints, which are
typically at least several dollars per call. The best consumer billing practices
really are best for the industry. As a result, AT&T and other responsible
carriers take great care to assure that their customers have the information
they need to make informed decisions. AT&T over the past year has provided
billing notices and inserts to tens of millions of customers that describe line
item charges and the reasons for them. Customers with questions about AT&T's
billing phrases usually had their questions clarified through discussions with
AT&T customer care representatives. Overall, AT&T spent millions of
dollars to educate its customers on these matters. And our work isn't done.
AT&T constantly conducts consumer research to assure that our billing
services keep pace with consumers' needs. Given this context, the "confusion
cost" involved in changing terminology to mandated language would substantially
outweigh any benefits of retooling descriptions on consumer bills. There is also
a very real financial cost involved in changing complex billing systems.
Industry members have demonstrated to the FCC that billing system changes are
neither simple nor cheap, and they can take significant time to implement. For
example, Ameritech managed to cut corners when they reformatted their bills
recently because the carrier intentionally left legacy software and hardware
systems intact. Even so, the project cost $8 million and took 18 months to
complete. In an effort to ensure optimal responsiveness to changing conditions
in the highly competitive long-distance marketplace, AT&T tries to maintain
a relatively flexible bill format. Nonetheless, many changes and/or new
requirements to the bill, which appear inconsequential on the surface,
necessitate alterations of a more systemic nature. This subsequently requires
long and costly lead times to accommodate necessary design, development, testing
and implementation related activities. It is not uncommon for more "permanent"
oriented changes to necessitate lengthy intervals ranging from several months to
over a year. Imposing additional systems costs would be bad news for consumers,
who ultimately bear the cost of regulation. Existing market forces already
provide reputable carriers with powerful incentives to provide their customers
with clear information. Billing provides a great opportunity for local
competitors to differentiate themselves from the capabilities offered by
incumbent local exchange carriers. ALTS, an association of facilities-based
local competitors, filed comments at the FCC opposing extensive new billing
rules, noting that they "would tend to mandate mediocrity in billing rather than
superior billing practices." We agree. In fact, a number of sound practices are
common in the industry today. A toll-free number is the easiest and most direct
way for consumers to reach vendors, including
telecommunications carriers. If a toll-free number is provided,
consumers may raise a question, register a complaint, or obtain information
(such as an address) that may be needed to pursue matters that the customer
wants to follow up in writing. Reputable carriers and consumers should not be
forced to implement or pay for cumbersome billing system changes because of the
questionable practices of a small number of bad actors. Promulgating new billing
regulations would be an unnecessary use of the FCC's limited resources, which
are much better spent on assuring that access rates are cost-based and that
universal service supports are fairly and equitably developed and applied. The
telecommunications industry has formed a coalition that is, so
to speak, "bipartisan" in nature, having the support both of incumbent local
exchange carriers and members of the long distance industry. The Coalition for
Affordable Local and Long Distance Service (CALLS) is promoting a plan that
would unify the SLCs, PICCs, and minute-based carrier common line charges into a
single SLC. In other words, the CALLS plan would thin out the "alphabet soup"
and simplify the bewildering rate structure in place today. If Congress truly
wants to help clear up consumer confusion, I would encourage you to support the
CALLS plan. Another positive step that Congress could take is to repeal the
Federal Excise Tax, which was first introduced as a "temporary"
luxury tax in 1898 to fund the Spanish American War. More than
a hundred years have passed, yet consumers still see the Federal Excise
Tax as a line item on their phone bill every month - despite the fact
that the war is long over and phone service is hardly a luxury these days.
Repealing this line item from phone bills would benefit consumers in every part
of the country. Ultimately, consumers are depending on Congress to ensure that
real competition develops in the local telecommunications
markets. Full competition will drive inflated local phone bills closer to cost -
just as long distance prices have plummeted under competitive pressure, price
competition in the local markets would be great news for consumers. Already, in
just the past year, we've witnessed phenomenal price breaks for high-speed
Internet access. SBC originally charged $89 per month for their entry-level DSL
service - now it's down to $39 because of competitive pressure. Competitors are
working hard to create competition in the local markets, but we need your help.
Strict enforcement of the Telecommunications Act is the best
way to deliver benefits to the consumer pocketbook. To sum up, AT&T believes
that the marketplace demands integrity from reputable carriers. It is in our
best interest to provide consumers with the clearest information possible about
the programs that they are supporting. The long distance industry provides ample
proof that consumers, if given the chance, will indeed use available information
to decide between carriers. Accurate billing gives consumers the ability to make
informed choices, which is essential in a competitive marketplace. And most
would agree that competition delivers the greatest consumer benefits. Thank you.
LOAD-DATE: March 15, 2000, Wednesday
